GBP/USD Forecast: Pound Sterling Loses Momentum as BoE Outlook Unchanged

Modified: Thursday, 15 January 2026 20:01 BST - Written by Tim Boyer

STORY LINK GBP/USD Forecast: Pound Sterling Loses Momentum as BoE Outlook Unchanged

The Pound to US Dollar exchange rate (GBP/USD) slipped back on Thursday after an initial lift from stronger-than-expected UK growth data faded, leaving investors unconvinced that the rebound marked a turning point for the British economy.

At the time of writing, GBP/USD was trading around $1.3415, drifting lower after an early uptick following the UK’s GDP release.

The Pound briefly found support after data from the Office for National Statistics showed the UK economy expanded by 0.3% month-on-month in November, reversing October’s 0.1% contraction and beating expectations for a modest 0.1% rise.

However, the upbeat headline failed to generate lasting momentum. November’s expansion marked the first month of growth since June and was widely viewed by markets as a technical rebound rather than evidence of renewed economic strength.

Confidence was further tempered by concerns over the composition of the growth. A sizeable portion of the increase was driven by a sharp 25.5% surge in car manufacturing, as Jaguar Land Rover ramped up output following disruption caused by a cyber-attack earlier in the year.

As these caveats sank in, Sterling gave back its initial gains and slipped back into a softer trading range.

The US Dollar, meanwhile, traded without strong direction as improving global risk appetite reduced demand for traditional safe havens. A brighter market mood followed signs of easing tensions in the Middle East after Iran paused planned executions linked to recent protests, prompting the US to dial back the prospect of military action.

Despite the shift towards a more positive risk backdrop, the Dollar managed to hold its ground. A mild uptick in US Treasury yields helped underpin the currency, limiting losses even as investors tentatively rotated into higher-risk assets.

GBP/USD Forecast: Fed Speakers and US Output in Focus

Looking ahead to Friday, the Pound to Dollar exchange rate may be influenced by the release of US industrial production data. Output is forecast to have risen by just 0.1% in December, a slowdown that could place modest pressure on the Dollar if confirmed.

Later in the session, comments from Federal Reserve policymakers Michelle Bowman and Philip Jefferson will be closely watched. Both are viewed as leaning dovish, and any remarks reinforcing expectations of looser monetary policy could weigh on the US currency.

With no major UK economic releases scheduled, Sterling may continue to take its cues from broader market sentiment. A sustained improvement in risk appetite could support the increasingly risk-sensitive Pound, while renewed caution would be more likely to favour the US Dollar.

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TAGS: Pound Dollar Forecasts