GBP to USD Forecast: Pound Sterling Upside to be Limited Ahead of UK Budget

Modified: Thursday, 20 November 2025 17:00 BST - Written by Tim Boyer

STORY LINK GBP to USD Forecast: Pound Sterling Upside to be Limited Ahead of UK Budget

The Pound to US Dollar exchange rate (GBP/USD) pushed higher on Thursday as traders assessed the implications of the latest US non-farm payroll release.

At the time of writing, GBP/USD hovered around $1.3097, up roughly 0.3% from the day’s opening level.

The US Dollar (USD) edged lower on Thursday after September’s long-awaited payroll figures finally landed.

Fresh data from the Bureau of Labor Statistics revealed the US economy created 119,000 jobs in September, comfortably beating expectations for a modest 50,000 increase.

However, the upbeat headline was tempered by a significant downward revision to July’s figures, with payrolls now estimated to have fallen by 4,000 instead of rising by 22,000 as initially reported.

The mixed nature of the release prompted markets to reassess Federal Reserve rate expectations, triggering a modest dovish tilt, although not enough to revive the prospect of a December rate cut.

The Pound (GBP) managed to gain ground on Thursday, though upside momentum was limited as investors remained cautious ahead of the UK’s upcoming autumn budget.

Chancellor Rachel Reeves is set to deliver the budget on 26 November, and uncertainty surrounding the scale and structure of potential tax increases or spending restraints is keeping investors on edge.

Concerns are growing that the measures required to stabilise the UK’s public finances could place further pressure on an already fragile economic backdrop.

Meanwhile, expectations that the Bank of England (BoE) will lower interest rates in December — reinforced by this week’s inflation data — continue to act as a cap on Sterling’s performance.

GBP/USD Forecast: Softer UK PMIs to Drag on Sterling?

Looking to Friday, the Pound to US Dollar exchange rate may soften as fresh UK PMI and retail sales figures are released.

Initial estimates for November suggest slower activity across the UK’s private sector, while retail sales for October are expected to stagnate — a combination that could deepen concerns around the UK’s economic outlook.

Later in the afternoon, the US will publish its own S&P PMI figures. While these are typically less market-moving than ISM surveys, any notable weakening may still inject volatility into USD trade.

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TAGS: Pound Dollar Forecasts