Economists at Goldman Sachs explain their three reasons to stay bullish on Sterling.

EUR/GBP to target 0.86

“The headwinds that burdened the Sterling in 2022, including high natural gas and energy prices, Brexit-related complications, and the relative stance of BoE policy, have all lessened, leading us to recommend staying short on EUR/GBP with a target of 0.86.”

“The BoE's recent significant forecast upgrades to growth and inflation suggest a risk of more persistent inflation that would necessitate further monetary policy tightening.”

“The BoE's policy stance no longer appears as an outlier in the G10, turning the previous negative influence on the currency into a positive one.”