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According to the latest poll of almost 60 foreign exchange analysts, the British pound is expected to head higher towards the end of this year, as the UK and European Union (EU) are likely to strike a post-Brexit trade deal.

Key findings

“But London and Brussels remain far apart in negotiations, and the risk of a no-deal Brexit at the end of 2020 remains firmly on the table, analysts also say.

Sterling would be at the same level in one- and three-months’ time.

It will then shift up a gear to $1.27 by end-December when Britain’s transition period after leaving the EU is due to expire. The pound will be around 4% stronger than current levels at $1.29 in a year.

Forecasts for the 12-month horizon were wide, ranging between $1.18 and $1.49, highlighting the uncertainty.

Against the euro the pound will not see much action for a year. One euro will be worth the 90 pence it was on Wednesday in six months. In a year it will fetch 88 pence.”