In sympathy with the euro, sterling has fallen against the dollar since the Ukraine conflict started. Economists at ANZ Bank expect the GBP to perform well against the shared currency in the coming months.

Better prospects on crosses

“The UK’s geographical proximity to the uncertainty overhanging Europe imply sterling will continue to be influenced by the path of the conflict. However, in the crosses, the prospects for sterling are brighter.”

“The Bank of England is primarily focused on inflation and we expect further focused monetary tightening. On the positive side, the high weight of services in the economy will help to insulate it from energy-related manufacturing fragility; demand for labour is very strong and business and government investment are rising.” 

“Our forecasts predict the UK will outperform many other major economies this year.” 

“Against the euro, we anticipate further modest gains in coming months.”