The pound will surge through the rest of this year, Europe’s largest asset manager has predicted, as Britain’s stable economy and government contrasts with the rest of the world.

Sterling will rise as high as $1.35 by the end of the year, France finance giant Amundi has forecast, from $1.293 today and $1.273 at the start of 2024.

Amundi, which as $2.3 trillion (£1.8 trillion) in assets under management, joins a rush into the pound by major banks including Goldman Sachs after Labour’s landslide election victory.

By contrast, the US presidential race has been thrown into uncertainty by the decision of Joe Biden to quit the race and the emergence of Kamala Harris as the expected Democratic nominee. 

Meanwhile, France is in political turmoil as it grapples with a hung parliament.

 The Bank of England is also expected to begin cutting interest rates later than its peers, boosting sterling.

Amundi’s head of global FX Andreas Koenig said: “You have an improvement in the economic environment, and you have a relatively stable government, so you have a lot of arguments in favour of sterling. 

“It might be less risky and it might be a diversifying alternative in the portfolio, which is supportive.”

The pound is up nearly 1.5pc since the start of the year, outperforming all Group-of-10 peers versus the dollar and breaching $1.30 last week. 

Against the euro, it is the strongest since August 2022 at around 84p. Amundi sees it eventually rallying further to make a euro worth 82p.

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