UBS Pound Sterling Year Ahead Forecast: GBP/USD To 1.35 By 2027 - Exchange Rates Org UK

What the desk is arguing

The desk believes that UBS's target of 1.35 for GBP/USD aligns with a broader market sentiment that anticipates gradual appreciation of the Pound. With multiple firms projecting similar targets, there appears to be a consensus around the idea that the Pound will strengthen as economic conditions stabilize and the Bank of England's stance influences investor confidence.

Supporting evidence for this view comes from the recent forecasts provided by several banks, all of which are clustered around similar targets for GBP/USD, reflecting an average consensus. Notably, the range from firms varies minimally, with the lowest target at 1.3300 and the highest at 1.4700 before Dec 2026, illustrating a unified outlook for the currency pair that largely dismisses significant bearish scenarios.

Where it sits in our coverage

Our current consensus target for GBP/USD is set at 1.3500 for March 2026, which is consistent with UBS's long-term outlook. The firm spread indicates a range between 1.3300 and 1.3800, suggesting a supportive environment for the Pound if economic indicators continue to be favorable.

Several firms have given forecasts that align with this view. For example: - JPMorgan: Dec26 target at 1.3600 - Goldman: Dec26 target at 1.3600 - MorganStanley: Dec26 target at 1.4700

This alignment strength underscores a generally optimistic outlook among analysts regarding the Pound's performance over the next couple of years.

How other firms see it

Most firms are aligned in their projections for GBP/USD, reinforcing the possibility of the Pound achieving the 1.35 target laid out by UBS. However, some banks maintain a slightly more conservative stance. For instance, Goldman shows a Dec26 target of 1.3600, reflecting a more measured approach toward currency appreciation.

Grouping of firms reveals a consensus: - JPMorgan, aligned with a target of 1.3600 - MUFJ, aligned with a target of 1.4000 - Barclays, aligned with a target of 1.4100

Conversely, BofA has a slightly lower target at 1.3400 for Mar26, indicating a cautious perspective that may factor in potential economic disruptions.