British Pound to Dollar Forecast: GBP/USD Risks Tilted to Upside

Modified: Saturday, 22 November 2025 21:35 BST - Written by Frank Davies

STORY LINK British Pound to Dollar Forecast: GBP/USD Risks Tilted to Upside

The Pound to Dollar exchange rate (GBP/USD) held near 1.3075 despite a sharp global risk-off move led by equities and crypto.

Softer UK data and renewed fiscal worries are limiting Sterling’s ability to extend higher, keeping consensus expectations anchored around a 1.30-1.31 trading band.

Markets now look to incoming fiscal updates and December BoE signals to judge whether support at 1.30 can hold.

GBP/USD Forecasts: Hold Above 1.30

Volatility across asset classes jumped on Thursday with a particular focus on equities. The US S&P 500 index initially traded sharply higher before a sharp reversal in Nvidia triggered notable losses.

The FTSE 100 index also dipped sharply to 1-month lows on Friday while bitcoin slumped to 7-month lows.

In these circumstances, the Pound was broadly resilient with the Pound to Dollar (GBP/USD) exchange rate trading around 1.3075, but there will be notable unease surrounding the UK fundamentals and risk conditions.

According to UoB; “The outlook for today is mixed after the choppy price movements. Today, GBP could trade between 1.3045 and 1.3120.”

Key support remains around 1.30.

The UK government borrowing requirement narrowed to £17.4bn for October from £19.2bn the previous year, but above consensus forecasts of £15.2bn.

For the first seven months of fiscal 2025/26, the deficit widened to £116.8bn from £107.8bn the previous year and around £10bn above ONS projections.

Richard Carter, head of fixed interest research at Quilter Cheviot commented; “Ultimately, today’s borrowing figures suggest Reeves is running out of room, and potentially time, to kick start the economy and get it growing once again. While rate cuts will help, inflation remains sticky and as such the Bank of England may not act as aggressively as the government would like. The ball is in Reeves’ court, but her next move will prove crucial next week.”

Kenneth Broux, head of corporate research FX and rates at Societe Generale commented; "It's very difficult and I think there's quite a bit of bad news already priced in, but it doesn't mean that it can't get worse."

He added; "If the gilt market has absolutely no trust in the new borrowing figures and whether the fiscal headroom can be delivered, then we will see a fair steepening of the gilt curve and that is going to result in a weaker sterling."

Retail sales data was also weaker than expected with a 1.1% decline in volumes for October compared with expectations of a 0.1% decline with the year-on-year increase held to 0.2%.

The UK PMI services-sector index also dipped to a 7-month low of 50.5 for October from 52.3 and below consensus forecasts of 52.0 although the manufacturing PMI index edged back above the 50.0 level to a 14-month high.

Notably, the rate of increase in output charges slowed to a 5-year low despite strong upward pressure on costs.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence commented; “November’s flash PMI surveys brought disappointing news on the UK economy. Economic growth has stalled, job losses have accelerated, and business confidence has deteriorated.”

He added; “The PMI data therefore suggest the policy debate will shift further away from inflation worries toward the need to support the struggling economy, hence adding to the chances of interest rates being cut in December.”

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TAGS: Pound Dollar Forecasts