Pound's Slump Continues as BoE Rate Hike Uncertainty Persists
The British Pound is expected to continue its downward trend against the US Dollar, according to Crédit Agricole's forecast. The bank predicts that the GBP/USD exchange rate could fall to 1.31 by December, with a potential recovery to 1.39 by the end of 2027.
Goldman Sachs and Citi are more optimistic, expecting a November interest rate hike from the Bank of England (BoE). However, Crédit Agricole warns that US economic outperformance and investment flows will sustain Dollar demand over the next three to six months.
The bank also notes that persistent inflation alongside weak growth could hurt confidence in Britain's economic and fiscal prospects. Crédit Agricole expects the BoE to keep Bank Rate at 3.75% through June 2027 before cuts later that year.