Pound to Dollar Bank Forecast: HSBC and ING Bearish, Scotiabank Turns Bullish

Published: Monday, 13 October 2025 10:30 BST - Written by Tim Boyer

STORY LINK Pound to Dollar Bank Forecast: HSBC and ING Bearish, Scotiabank Turns Bullish

Political and fiscal headwinds continue to dominate the Pound to Dollar (GBP/USD) landscape. ING and HSBC expect the pair to remain below 1.40 through next year, but Scotiabank sees scope for recovery to 1.48 by end-2026 if the Bank of England tightens less aggressively than the Fed.

GBP/USD Forecasts: Political pressure intensifies

ING and HSBC forecast that the Pound to Dollar (GBP/USD) exchange rate will be held below 1.40 throughout the next 15 months with the Pound and dollar both under pressure.

Scotiabank is backing GBP/USD gains to 1.48 by the end of 2026 as Pound resilience combines with dollar losses.

The Pound to Dollar (GBP/USD) exchange rate dipped sharply to 2-month lows near 1.3260 during the week before a recovery to 1.3350.

The dollar posted sharp losses late on Friday as the US-China trade wars intensified again with President Trump threatening to impose 100% tariffs from November 1st amid a row over rare-earth mineral exports.

Pound and dollar sentiment remains in a state of flux. There is a high degree of uncertainty over the US outlook, especially with the on-going government shutdown.


Markets are currently pricing in an 80% chance of two Fed rate cuts by the end of this year.

MUFG noted that the latest Dallas Fed survey suggested that labour supply has declined sharply. According to the bank; “there is an obvious risk here the FOMC could over-react and cut too much in anticipation of a slowdown in wage growth that won’t actually materialise.”

SocGen, however, is more concerned over the labour market; “The growing wedge between hiring at smaller and larger private sector companies manifested in the August and September ADP and suggests downside pressures are building.”

ING sees evidence of wider unease in the US economy; “Consumers remain anxious about the potential for big tariff-induced price hikes, but the increasingly dominant worry is the state of the jobs market. Job security perceptions look particularly weak, and in an economy where the consumer accounts for 70% of all economic activity, the Fed will remain under pressure to offer more support.”

It added; “We suspect a majority of Fed voters will end up agreeing with him and expect 25bp cuts at October’s and December’s FOMC meeting, with a further 50bp of cuts in early 2026.”

There are important questions over UK fiscal and monetary policy with next month’s budget looming large.

HSBC noted concerns over the UK performance; “The UK Activity Surprise Index moved downward in September with negative surprises in UK manufacturing and industrial production, Services PMI from Markit/CIPS and PMI manufacturing. These outweighed the positive surprises such as net consumer credit.”

ING noted that several Bank of England members, including chief economist Pill are concerned that inflation will remain above target over the medium term.

According to ING; “We think those fears are overblown, not least because, unlike that episode, the jobs market is in a much more fragile state. Markets, we think, are underpricing the extent of the Bank’s easing cycle that’s still to come. Comments from both hawks and doves at the BoE have emphasised that further cuts are likely.

Scotiabank noted short-term UK fiscal risks, but added; “Fundamentals are supportive of medium-term currency strength as interest rate differentials are expected to reflect an outlook for relative central bank policy that anticipates less easing from the BoE— relative to the Fed.”

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TAGS: Currency Predictions Pound Dollar Forecasts