FXStreet reports that economists at ANZ Bank discuss GBP/USD prospects.

“Following the release of Q1 GDP data (-1.5% QoQ), we have updated our UK recovery profile to better reflect the timing of the re-opening. In absolute terms, we make no material change to our end 2022 GDP estimate. However, the important nuance is that the UK can now close the output gap sooner. We now expect GDP will return to pre-pandemic levels by the middle of 2022 and forecast growth at 6.2% this year and 5.3% next.”

“If, as we expect, the economy continues to recover, we think the BoE will reduce QE further in Q3. However, it will be much more patient in raising interest rates, and we do not anticipate any adjustment to the bank rate over our forecast horizon to the end of 2022.”

“Within the framework of expected USD weakness, we anticipate further GBP appreciation and our 12-month forecast remains 1.50.”

“Whilst we are constructive on the pound’s prospects, price action has the potential to be volatile in coming months.”