BofA 'bullish' on sterling, lifts year-end 2024 target

BofA Global Research raised its year-end target for the British pound to $1.37, saying the strong labour market means the Bank of England is likely to keep interest rates "higher for longer".

The Wall Street brokerage previously expected the currency to end the year at $1.31.

BofA strategists on Wednesday said they are "bullish" on the pound, noting that Britain has elevated services inflation and a tight labour market.

"With the domestic economy continuing to improve, the pessimistic read on UK growth is harder to reconcile."

The currency GBPUSD fell slightly on Thursday to just under 0.1% at $1.2558 after data showed the country's economy fell into a recession at the end of 2023.

Recent survey data has indicated that Britain's economy is starting to pick up again.