Pound Sterling Forecast 2024

Where will the pound go in 2024?

Several important topics could drive the value of sterling in 2024. Any clients considering a currency transfer involving sterling may benefit from understanding these, and their options in advance.

A small change in the value of sterling on a large amount of currency can lead to big changes in the ultimate value of the currency transaction. On a £200,000 purchase of Euros, say for an overseas property, the rates today versus the lows of February last year, would get you an extra €8,000.

The pound is trading in the middle of the ranges of 2023 at present, with GBPEUR at 1.15 versus the 1.11-1.18 of last year. On GBPUSD we saw rates between 1.18 and 1.31, so the current 1.26 remains in the middle of this range, if slightly closer to the higher end.

This suggests the pound might break out in either direction, and there are various events to be conscious of that could move the market.

What events will drive the pound this year?

Inflation / Interest Rates – The raising and lowering of interest rates is key to driving the relative strength and weakness of currency. Essentially, a higher interest rate leads to a stronger currency and lower interest rates typically see a weaker currency.

The Bank of England is predicted to cut interest rates this year, which could weaken the pound.

The main factor to determine this is Inflation. High Inflation has been a feature of the UK and global economy in recent years, and with this falling, the need for high interest rates falls.

Economic Growth – The market will be closely monitoring the UK’s economic growth story, as we are teetering on the edge of recession.

Any signs this is the case, could see sterling weaker. An economy in recession is more likely to require lower interest rates, so this prospect of recession, increases the potential for a weaker pound.

UK Election / Politics – We are not too sure when but this year will see a General Election. There is an outside chance it could slip into early 2025, but that is only if Rishi Sunak leaves it until the very last moment, which seems less likely.

The most likely time is the Autumn, although a move earlier this year is possible, if Rishi thinks that might be his best shot to win.

How can I manage my exposure to the FX markets?

Our experts at pound sterling forecast will take the time to understand your position and offer up the latest FX forecast data, a run-through of the different FX contracts that might be suitable, and keep you updated on important events and news.

For more information please get in touch with us directly via the form attached. Alternatively, please contact me directly with a phone number and a brief overview of your situation.

Thank you for reading and a Happy New Year to all our readers!

Jonathan

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