Sterling Bulls Are Pretty Far Out on a Limb
Columbia Threadneedle sees the pound strengthening close to $1.50, betting on interest-rate alchemy.
Every now and then an outlandish forecast grabs your attention enough to elicit this response: Really? One such example this week is from Steven Bell, chief EMEA economist at the asset manager Columbia Threadneedle Investments. He expects sterling will rise to $1.50 next year. That's a 13% gain on top of the British pound’s performance as the strongest Group of 10 currency for the past two years. It’s gained 30% since its flirtation with near parity to the dollar during Liz Truss' ill-fated 2022 administration.
Did I miss something about the UK suddenly taking over the mantle of economic powerhouse from the US? For a currency to make a sustained upward shift in its valuation it has to be based on improved fundamentals or prospects, not just a short-term interest-rate premium.