Market Outlook: Barclays Remains Optimistic on GBP

Forex - Barclays remains optimistic about the GBP, predicting that GBP/USD will rise to 1.30 and EUR/GBP will decline to 0.80 in the coming quarters. Barclays envisions a positive trajectory for the GBP until 2025, supported by fiscal flexibility, limited exposure to tariff risks, and structural improvements in UK-EU relations. The bank noted that the outlook for the GBP is bolstered by these structural enhancements, fiscal expansion, and relative resilience against tariff risks. Barclays stated, "While this puts the pound in a favorable position against both the dollar and the euro, uncertainties regarding labor cost dynamics continue to be a factor to monitor."