UK CFTC data shows GBP non-commercial net positions at -25.8K. This compares with the previous reading of -13.9K.
The latest data shows a clear jump in bearish sentiment toward the British Pound. Speculators have almost doubled their net short positions. This suggests traders are increasingly confident that Sterling will fall. It is the biggest week-to-week rise in short positions since Q3 2025.
This gloom likely reflects recent economic data from late 2025 and early 2026. Last month’s inflation report surprised to the upside at 3.8%. At the same time, the Office for Budget Responsibility cut its Q1 2026 growth forecast. Together, these reports support the view that the Bank of England is stuck: it must fight inflation without tipping the economy into recession.
For the next few weeks, we see buying put options on GBP/USD as a simple way to target more downside. The pair is struggling to stay above 1.2150. Buying puts with a strike near 1.2000 could offer an attractive risk-reward setup. To reduce upfront cost, defined-risk put spreads may be the better choice.
Still, this trade is becoming crowded. When positioning gets too one-sided, reversals can be sharp. A similar (but larger) build-up in shorts happened in 2022 and ended in a violent short squeeze. Any unexpectedly hawkish signal from the Bank of England could trigger the same type of move.
Because of that risk, traders who short via futures should use strict stop-loss orders. The goal is to stay with the bearish trend while limiting damage if sentiment flips. Political risk also leans negative for the Pound: recent polls show the government trailing by 15 points, adding pressure that could weigh on Sterling.
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