ING
2026 FX Outlook
LIVE10 November 2025USD bearish
Back to CurrenciesModerately Bullish
GBP/USD
Sterling resilience amid fiscal headwinds
ING Forecast Path
vs Prior ForecastCurrent target: 1.36Prior target: 1.35Revision: +0.7%
Cross-Firm Forecast Comparison
Key Drivers
BoE rate path
UK growth resilience
Fiscal policy
EU trade relations
Services sector performance
All Firm Targets (Dec '26)
MSStrongly Bullish1.4700
DBBullish1.4200
BARCBullish1.4100
MUFGModerately Bullish1.4000
BofABullish1.4000
INGModerately Bullish1.3600
JPMTactically Bullish1.3600
GSModerately Bullish1.3600
Key Issues for 2026
1.BoE more hawkish than ECB and Fed, providing yield support
2.UK services sector remains resilient despite manufacturing weakness
3.Fiscal consolidation creates medium-term headwind
4.Brexit trade frictions gradually easing with EU
5.London financial services sector attracting capital inflows
Risk Scenarios
Bullish1.38-1.40
UK growth surprise, BoE delays cuts further, EU trade deal progress
Base case1.34-1.36
BoE cuts modestly, growth resilient, fiscal broadly neutral
Bearish1.28-1.30
UK recession, BoE aggressive cuts, fiscal deterioration
Analysis Summary
Sterling should benefit from resilient UK growth and a relatively hawkish BoE. However, gains may be capped by lingering Brexit-related structural headwinds and fiscal challenges. GBP/USD should hold above 1.35 for most of 2026.