GBP/USD Forecast: UK Fiscal Concerns Put Pound Sterling in Focus

Modified: Monday, 21 September 2026 20:01 BST - Written by David Woodsmith

STORY LINK GBP/USD Forecast: UK Fiscal Concerns Put Pound Sterling in Focus

The Pound US Dollar (GBP/USD) exchange rate remained subdued on Monday as the impact of last week’s central bank decisions continued to shape the pairing.

At the time of writing, GBP/USD was trading at $1.3387, having slipped marginally on the day.

The Pound (GBP) struggled to find a clear direction on Monday, with the absence of major UK data leaving Sterling without a fresh catalyst.

The currency was also subdued after last week’s Bank of England (BoE) decision.

The central bank kept interest rates unchanged while slowing the pace of its bond sales, a decision that added to downward pressure on the Pound.

The US Dollar (USD) initially edged higher on Monday, with the ‘Greenback’ continuing to draw support from last week’s Federal Reserve interest rate decision.

The Fed raised interest rates unanimously for the first time since 2023, prompting markets to increase their expectations for further hikes.

These bets continued to lend support to the US Dollar at the start of the week.

However, the safe-haven currency struggled to build on its gains as risk appetite improved through the European session.

Near-Term GBP/USD Forecast: UK Borrowing Data in Focus

Looking ahead, the Pound could find a clearer sense of direction on Tuesday as the UK’s latest borrowing figures take centre stage.

If government borrowing increased in August, Sterling could face pressure as markets reassess the state of the public finances ahead of the Autumn Budget.

The Confederation of British Industry (CBI) will also publish its industrial trends orders, potentially adding to the Pound’s headwinds.

A marked deterioration in industrial orders could further weigh on Sterling.

Meanwhile, attention will turn to two Federal Reserve speakers for clues on the outlook for the US Dollar.

John Williams and Philip Jefferson both backed last week’s rate hike, although they sit towards the more dovish end of the spectrum.

Should either suggest that a single hike could be sufficient to bring inflation under control, the ‘Greenback’ could give up some ground.

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TAGS: Pound Dollar Forecasts