BofA Expects GBP to Strengthen Against Euro and Dollar

Foreks - Bank of America has presented a 2025 forecast predicting that the British pound (GBP) will reach its highest level against the euro since 2016 and rise by 8% against the dollar. BofA expects the GBP to increase to 80 pence per euro, its strongest level since the Brexit vote in 2016, and to 1.38 dollars by the end of 2025. This is attributed to stronger growth in the UK compared to the eurozone, along with fiscal stimulus measures and relatively high interest rates in the UK.

The pound has been the best-performing G-10 currency against the dollar this year. The strength of the pound is due to the political stability following elections in the UK and expectations that the Bank of England will implement interest rate cuts more slowly than the European Central Bank, especially in light of recent turmoil in major Eurozone economies. Athanasios Vamvakidis, the global head of G-10 FX strategy at BofA, stated in a briefing that "the momentum for the pound's strength is still there."