Pound Sterling to Dollar Forecast: GBP Rises on BoE Hold, Shutdown Weighs on USD

Modified: Thursday, 6 November 2025 22:30 BST - Written by Tim Boyer

STORY LINK Pound Sterling to Dollar Forecast: GBP Rises on BoE Hold, Shutdown Weighs on USD

The Pound to US Dollar (GBP/USD) exchange rate edged higher on Thursday after the Bank of England (BoE) voted to keep interest rates unchanged, while concerns over the ongoing US government shutdown weighed on the Dollar.

At the time of writing, GBP/USD was trading around $1.3085, up roughly 0.2% from Thursday’s opening levels.

The Pound (GBP) gained traction early in the session as investors anticipated that the BoE would maintain borrowing costs at 4%.

The central bank’s decision met expectations, but the 5–4 vote split on the Monetary Policy Committee (MPC) revealed growing support for a rate cut, adding some initial volatility to Sterling.

Governor Andrew Bailey tempered the dovish undertone by stating that he wanted more evidence inflation had definitively peaked before easing policy further. His remarks helped the Pound stabilise and move modestly higher through Thursday’s European session.

Meanwhile, the US Dollar (USD) came under mild pressure amid a combination of improved global risk sentiment and continued uncertainty surrounding the US government shutdown.

Reports that the federal government will cut airline traffic by 10% at 40 major markets from Friday prompted fresh concerns about the potential hit to growth and employment.


Investors worried that a prolonged shutdown could slow economic momentum and push the Federal Reserve towards deeper rate cuts if conditions deteriorate further.

GBP/USD Forecast: Fed Comments and Consumer Data in Focus

Looking ahead, the Pound is likely to remain sensitive to market reaction following the BoE’s rate decision, with traders assessing the implications of the narrow vote split for future monetary policy.

In the UK, focus will also turn to ongoing budget speculation, as investors weigh whether Chancellor Rachel Reeves will raise taxes to close the government’s fiscal gap — a scenario that could temper Sterling’s gains.

Across the Atlantic, attention shifts to the University of Michigan’s consumer sentiment survey, expected to show a slight decline in confidence for November.

A weaker reading could reinforce the case for Fed easing and weigh further on the Dollar.

Additionally, speeches from Federal Reserve officials John Williams, Philip Jefferson, and Stephen Miran will be closely monitored. As all three are considered among the more dovish voices on the committee, any soft rhetoric on inflation or policy could push the Greenback lower into the weekend.

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TAGS: Forecasts