Goldman Sachs have lowered their forecasts for GBP/USD, have a "tactically bearish view"

Goldman Sachs are expecting the Bank of England to remain on hold at coming meetings, through to Q4 2024, saying the BoE has completed its rate hiking cycle.

GS say they hold a "tactically bearish view" on the pound, citing weaker growth, high inflation, and lower real rates. GS add that if incoming data shows a more negative outlook for domestic growth than even they expect that'll pressure GBP lower still. As it is GS forecast:

• 1.18 for GBP/USD on a 3-month horizon
  • from 1.24 previously
  • 0.91 for EUR/GBP on the 3-month horizon (previously 0.86)
• 1.20 on a 6-month horizon
  • 1.29 previously
  • 0.92 for EUR/GBP (previously 0.85)
• 1.25 on a 12-month horizon
  • 1.33 previously
  • 0.90 for EUR/GBP (previously 0.84)

Goldman Sachs flagged the main risk to their projections as incoming data surprising to the upside, which would likely prompt further action from the Bank of England.