Sterling Soars: More Room to Expand

Pound Power: Why the UK’s Currency Is Giving the Dollar a Double Dose of Jealousy

So What’s All the Buzz About?

For the first time in almost four years, the British pound shot up to a 13‑percent gain in 2025, hitting $1.37 against the dollar on Thursday. It’s the best‑performing major currency of the year, and the buzz is louder than ever.

“Pound in Flight” – Nigel Green’s Take

Nigel Green, CE0 of deVere Group, says the pound is cruising high and likely to go even higher. “Several forces are aligning to keep sterling at the top spot for the foreseeable future,” he quips.

Why Is the Dollar Struggling?

U.S. economic data is feeling a bit weak.
Concerns about fiscal sustainability are floating around.
Uncertainty about trade, tariffs, and policy under President Trump keeps the U.S. on edge.

“Dollar weakness definitely plays a role, but it’s a mistake to pin all of sterling’s strength on that alone,” Nigel points out.

Three Years of UK Drama

Remember 2022? Liz Truss’s mini‑budget blew up the pound and UK bonds, sending a crash wave across markets. Fast‑forward to now: the currency is on a comeback trail because investors are seeing new stability in the UK’s politics and economy.

Why The UK’s Numbers Have Been Smashingly Good

GDP in Q1 2025 expanded 0.7%—beating expectations.
Consumer spending is surprisingly resilient thanks to strong wage growth.
Business investment is on the rise after a fresh U.S. trade deal finalized at the G7 summit.

“Growth is picking up. Inflation is largely under control. Jobs are solid. The new trade deal gives exporters a reason to celebrate,” Nigel says.

Bank of England’s Playbook

The Bank of England is holding rates at 4.25% but is expected to start easing later this year, albeit more slowly than the U.S. Federal Reserve. Markets think the BoE will cut rates cautiously, which could narrow the U.S.‑UK rate gap and give the pound even more room to climb.

Investor Sentiment and the Road Ahead

Hedge funds and institutional investors are stacking long positions on sterling.
Analysts predict the pound could breach $1.40 within the next year.
Clients are urged to “prepare for sterling strength to remain a market theme well into 2026.”

“There’s a global shift away from heavy reliance on the dollar as a reserve currency,” Nigel explains. “This trend backs alternatives like sterling.”

What to Expect (or Not)

Short‑term volatility is possible, especially around upcoming BoE decisions and U.S. political headlines. But deVere is bullish: “The pound is on the move, and investors should position accordingly.”