UBS Pound Sterling Forecast: Bullish GBP Bias Despite UK Political Risks - Exchange Rates Org UK

What the desk is arguing

UBS has expressed a bullish bias for GBP, suggesting that underlying economic conditions may bolster the currency's strength. The analysis underscores that despite prevailing political uncertainties in the UK, factors such as robust economic metrics could continue to support GBP appreciation.

The desk anticipates that as macroeconomic resilience persists, market participants may overlook political volatility, which UBS implicitly contests by arguing that the potential for GBP gain outweighs concerns stemming from political instability.

Where it sits in our coverage

Our current consensus target for GBP stands at 1.075 with a trading range of 1.04 to 1.12. UBS's bullish stance aligns with this outlook, suggesting that continued strength in the UK economy may indeed manifest as currency appreciation, consistent with our broader market view.

Firms like JPMorgan and Goldman Sachs have also indicated positivity around GBP, with published targets reflecting similar bullish expectations. Specifically:

• JPMorgan: 1.10, Mar-26
• Goldman Sachs: 1.08, Mar-26
• Citi: 1.06, Mar-26

How other firms see it

While UBS and several others maintain a bullish perspective, there are dissenting views emerging in the market. BofA has articulated a contrary position, suggesting skepticism towards GBP's resilience given the political landscape.

Notably, the following firms express a more cautious stance on GBP:

• BofA: 1.04, Mar-26
• Morgan Stanley: 1.05, Mar-26
• Deutsche Bank: 1.06, Mar-26