Gbpusd Forecast Barclays

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Gbpusd Forecast Barclays

Eur/Gbp And Gbp/Usd Forecast - Barclays

According to Barclays, the GBP will remain strong during the next quarters. They have forecasted the GBP/USD to rise towards 1.30. Similarly, the EUR/GBP is expected to decline to 0.80 as a sign of the GBP strength.

The EUR/GBP and the GBP/USD pairs will move towards these forecasted levels during the next few quarters. These forecasts are made based on fiscal policy, structural improvements, and tariff risks.

Less Risk Of Us Tariffs

Starting with structural improvements and the close ties between the UK and the EU. It will also provide support to Pound (GBP), which is the basis for a bullish forecast.

The UK government has announced a big fiscal stimulus that's worth 1% of the country's GDP. This will increase the domestic demand but could prove to be a roadblock for the BoE's rate-cutting cycle.

Another factor that's important for the EUR and the GBP is the employment vs the labor cost. It still remains to be seen whether the higher labor cost will lead to lower employment or higher inflation. This could have serious implications for the supply side.

Another factor that is bullish for the GBP is that the UK has a trade deficit with the US. This means there's a very low chance that the UK will receive the same tariff punishment as other countries like Canada, Mexico, and China.

In fact, even the Eurozone faces tough tariffs from the USA, which makes the GBP a better choice than the EUR.

Overall, Barclays believes that the GBP will have a smooth path throughout 2025. This will be due tot he limited tariff risks, fiscal resilience, and the improved relationships between the UK and the Eurozone.

All of this perfectly sets the stage for a bullish GBP against the USD, EUR, other currencies. However, the one uncertainty that remains at large is related to the increased labor costs.

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