Scotia Bank have moved its cable forecast higher, targeting 1.48 for the end of 2021 and 1.50 for the end of 2022.
Scotia had raised their forecast for the pair as recently as January and are doing so again.
- Investors are rewarding the GBP for the UK government’s fast and effective vaccination programme. This will support an earlier economic re-opening and stronger economic growth later this year.
- The post-Brexit environment remains somewhat uncertain (especially with regard to the UK’s access to the EU financial services market and lingering border issues)
- but we think a relatively early end to lockdowns, positive growth prospects and declining risks of additional Bank of England monetary policy easing suggest the GBP can rise further in the coming months.