The Pound Sterling (GBP) is down slightly by 0.1% against the US Dollar (USD), but it’s performing well compared to most G10 currencies. Traders are watching fiscal news closely, especially with the budget coming out on November 26. Interest rate differences have improved, giving the GBP some support. Important domestic risks include the Consumer Price Index (CPI) report due on Wednesday, with retail sales and preliminary PMIs coming out on Friday.

Bank Of England Rate Prediction

The rates market expects about 20 basis points of rate cuts at the next Bank of England (BoE) meeting in December, with a total of 50 basis points projected by June. This expectation lines up with the BoE’s messaging and the weakening UK labor market. The Relative Strength Index (RSI) for GBP is slightly negative, sitting in the low 40s, and has moved away from the oversold levels seen in early November. The GBP’s recovery seems to have stalled, hitting resistance just below 1.32, while support is found around 1.3080. As of today, November 17, 2025, the pound remains stable against most major currencies, having stalled just under the 1.32 resistance level. Near-term support is around 1.3080, making it easier for traders to plan strategies. This stability suggests that traders are waiting for a clear trigger before making significant trades.

Upcoming Budget Release

The main focus is the budget release on November 26, which poses the biggest risk ahead. Implied volatility for options expiring after this date has likely increased, indicating potential shifts in fiscal policy. Given the government’s recent focus on reducing spending after 2024’s increased budgets, any unexpected stimulus could lead to a rally, while a stricter budget could put pressure on the pound. This week is crucial with CPI data scheduled for Wednesday, followed by retail sales and preliminary PMIs on Friday. Last month’s CPI for October 2025 was 3.8%, so another high figure might challenge expectations for a rate cut soon. On the other hand, weak retail sales data—after a 0.5% drop last report—would support the view of a slowing economy. In the long run, the market is anticipating a 20 basis point cut from the Bank of England in December, reflecting concerns about the UK labor market. Unemployment rose to 4.4% in the third quarter of 2025, providing the central bank with reason to adopt a more cautious approach. This perspective suggests that any rebounds in the pound may be temporary and could offer selling chances. With the budget approaching, traders might look at strategies that benefit from increased volatility, such as a long straddle using options that expire after November 26. Those with a bearish outlook due to the Bank of England’s dovish stance might consider a bear put spread to target movement towards the 1.3080 support level. These strategies are wise given the various fundamental factors at play. Create your live VT Markets account and start trading now.

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