What the desk is arguing
Goldman Sachs is anticipating a bullish outlook for GBP/EUR, predicting that it will reach 1.11 within the next year. This projection hinges on the bank's belief in a recovery in the UK's economic resilience and a potential divergence in monetary policy between the Bank of England and the European Central Bank.
Supporting this thesis, Goldman points to factors such as improving economic indicators in the UK and anticipated interest rate changes that may further strengthen the pound. The bank is implicitly rejecting a more bearish outlook, which suggests that Eurozone economic stagnation could weigh heavily on the euro against a recovering GBP.
Where it sits in our coverage
Our current consensus target for GBP/EUR is 1.075, with a tight firm spread between 1.04 and 1.12, placing us somewhat lower than Goldman’s prediction. This divergence suggests a more cautious stance from our analysis compared to Goldman’s optimistic view.
Several other firms have offered their perspectives on GBP/EUR targets as well, including:
How other firms see it
In contrast to Goldman, BofA holds a bearish view, with a target of 1.04 for March 2026, reflecting concerns over the UK’s ongoing economic challenges. On the other hand, firms like JPMorgan and Barclays are somewhat aligned with Goldman’s optimism, but they do not fully embrace the same level of bullishness.
- Firm Perspectives:
- BofA: Contrary stance, target 1.04.
- JPMorgan: Aligned stance, target 1.10.
- Barclays: Aligned stance, target 1.08.