Barclays
FX Outlook 2026: Navigating the Turn
LIVE28 November 2025USD bearish
Back to CurrenciesBullish
GBP/USD
Fiscal clarity makes GBP our top pick
BARC Forecast Path
Cross-Firm Forecast Comparison
Key Drivers
UK budget credibility
BoE rate path
Growth resilience
Carry vs EUR and JPY
Services sector strength
All Firm Targets (Dec '26)
MSStrongly Bullish1.4700
DBBullish1.4200
BARCBullish1.4100
MUFGModerately Bullish1.4000
BofABullish1.4000
JPMTactically Bullish1.3600
GSModerately Bullish1.3600
INGModerately Bullish1.3600
Key Issues for 2026
1.UK budget removes Truss fiscal premium -- GBP re-rates higher
2.BoE hawkish hold maintains carry advantage vs EUR and JPY
3.UK growth resilience on services sector strength
4.Improving productivity metrics narrow gap vs US
5.GBP/USD 1.41 is our highest conviction G10 call
Risk Scenarios
Budget relief rally1.38-1.41
Budget credible, growth resilient, BoE hawkish
Fiscal drag returns1.28-1.32
Budget disappoints, BoE forced to accelerate easing
Analysis Summary
Top G10 pick. UK fiscal clarity post-budget removes Truss premium. BoE's hawkish stance maintains carry advantage. UK growth resilience and improving productivity metrics support GBP outperformance vs both EUR and USD. Strong conviction in GBP/USD 1.41 target.