GBPUSD: Moving Gradually Higher From Here

Despite recent political volatility in the UK, GBPUSD is expected to recover from current levels near 1.35 toward 1.40 by year-end 2026. The rebound is supported by robust UK economic data, a hawkish BoE stance, and emerging political uncertainty in the US.

Key Takeaways

• 1.GBPUSD is currently undervalued and expected to recover toward 1.40 by the end of 2026 as political uncertainty in the UK fades.
• 2.UK economic data remains robust with the Citi Economic Surprise Index above 80, supporting growth momentum despite recent political noise.
• 3.US political uncertainty ahead of the November midterm elections is expected to cap the USD in late 2026, providing a tailwind for the GBPUSD pair.

Table of Contents

• Political volatility and economic resilience drive sterling
• Upside potential as fundamentals reassert
• CIO Forecast- GBPUSD
• GBPUSD to rebound in 2H26
• UK economic data have surprised to the upside
• Investment considerations
• Appendix

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