GBP/USD to edge higher towards 1.41 in the second half of 2022 – Westpac

The Bank of England (BoE) is expected to start tightening as growth and inflation are set to remain elevated. could potentially start raising rates this year. In such a context, economists at Westpac see some upside for GBP/USD and forecast cable at 1.41 by the second half of 2022.

See – GBP/USD: More hawkish BoE to lift the pound – NBF

Sterling is expected to receive support from monetary and fiscal policy

“Its fuel shortage notwithstanding, the UK is expected to experience a robust recovery in GDP back to near the potential GDP level that would have been seen had the pandemic not occurred as well as sustained inflation at or above target over the entire forecast period. As a result, the BoE is expected to tighten, in line or just ahead of the FOMC.”

“We look for GBP/USD to rise to 1.41 in the second half of 2022, and to only edge back to 1.39 at end-2023.”