GBP/USD Forecast: Pound Sterling Under Pressure as BoE Cut Expectations Grow

Modified: Tuesday, 11 November 2025 22:39 BST - Written by Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Under Pressure as BoE Cut Expectations Grow

The Pound-to-Dollar exchange rate (GBP/USD) fell on Tuesday after a surprise jump in UK unemployment reinforced speculation that the Bank of England (BoE) could lower interest rates as soon as next month.

At the time of writing, GBP/USD was trading around $1.3135, down roughly 0.3% on the day.

The Pound (GBP) slipped sharply at the start of the session after figures from the Office for National Statistics (ONS) showed the UK unemployment rate rising to 5% in the three months to September, up from 4.8% and above expectations for a smaller increase to 4.9%.

This marks the highest level of joblessness in more than four years and comes alongside evidence of easing wage pressures, with average earnings (excluding bonuses) slowing from 4.7% to 4.6%.

The combination of rising unemployment and weaker pay growth added to signs that the UK jobs market is losing momentum. Investors responded by ramping up bets on a BoE rate cut in December, with markets now pricing in a 73% probability of a move, pushing Sterling lower across the board.

The US Dollar (USD), meanwhile, traded in mixed fashion as optimism over progress toward ending the US government shutdown was offset by improving risk appetite that limited safe-haven demand.

The Senate’s approval of a budget bill on Monday evening was seen as a critical step toward resolving the crisis, helping to restore some market confidence. However, with the House of Representatives yet to vote, traders remained cautious.

A potential resolution would reopen the release of delayed federal data, including key employment and inflation figures, which could quickly reshape expectations for a Federal Reserve rate cut in December.

GBP/USD Forecasts: Central Bank Commentary to Steer Direction

Looking ahead, a series of speeches from central bank officials on Wednesday will likely set the tone for the Pound to Dollar exchange rate.

In the UK, remarks from BoE Chief Economist Huw Pill will be closely watched after he previously warned about persistent inflation pressures. Should Pill soften his stance following the weaker jobs data, Sterling could extend its decline. Conversely, any suggestion that policymakers remain wary of cutting rates too soon could offer the Pound some relief.

Across the Atlantic, comments from Federal Reserve officials John Williams, Christopher Waller, and Stephen Miran will be in focus. As all three are viewed as relatively dovish, any fresh hints of a softer Fed policy outlook could weigh on the Dollar, limiting its gains against the Pound.

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TAGS: Pound Dollar Forecasts