GBP/USD forecast: pound near 1.32 despite UK 0.7% Q3 GDP growth
GBP/USD ended the week near 1.32, the pound’s weakest level since mid-October, even though the UK economy grew a solid 0.7% in the third quarter. Analysts expect the pair to stay close to that level in the near term, with the Bank of England and the Federal Reserve both leaning towards more rate hikes.
Trading Economics had sterling at about $1.3213 on Friday, 13 November, down 0.17% on the day. Over the previous seven sessions the pair had already fallen about 1.7% from near 1.3471, according to Investing.com.
How fast did the UK economy grow in Q3 2026?
Faster than in the first half of the year. The Office for National Statistics estimated that GDP grew 0.7% in July to September compared with the previous quarter, and 1.9% compared with a year earlier. Services grew 0.9%, production 0.1%, and construction fell 0.7%.
One standout was technology. Computer programming, consultancy and related activities grew 4.4% in the quarter, which the ONS linked to AI and cloud work. September alone grew 0.2%, beating forecasts of no growth. It was the fastest quarterly growth of the year so far, after 0.6% in the first quarter and 0.5% in the second, according to Investing.com.
Why is the pound falling if UK growth is strong?
Because GBP/USD is a two-sided trade, and the US side is stronger right now. US consumer prices rose 0.4% in October and core prices 0.3%, both a tenth above forecasts. Futures now imply an 89% chance of a 25-basis-point Fed hike on 9 December and an 11% chance of 50 basis points, and the US 10-year Treasury yield climbed to 5.07%.
That pushed the dollar index to a 19-month high. The same move took the euro to its weakest since April 2025, covered in our EUR/USD forecast, and the yen to 160, covered in our USD/JPY report. Against that tide, sterling’s relatively small fall is a sign of underlying resilience.
Will the Bank of England raise rates again in December?
Markets think it is likely. On 5 November the Monetary Policy Committee voted 8-1 to raise Bank Rate by 0.25 percentage points to 4%, its first hike since August 2023. Catherine Mann voted for a bigger move to 4.25%. The minutes said returning inflation to target “is likely to require more policy tightening, including in the near term.”
UK CPI inflation was 3.5% in September, well above the 2% target, and the Bank’s own projections cited by Investing.com see it rising further into 2027. Trading Economics reports that markets now price an over 80% probability of a BoE hike in December, with the stronger GDP data adding to those bets. The next decision is on 17 December, eight days after the Fed.
That is the key tension for the pair. Both central banks are tightening. Whichever one surprises the market more, in either direction, is likely to set the next big move in GBP/USD.
What is the GBP/USD forecast from analysts?
Most forecasts are cautious rather than dramatic. Trading Economics’ model expects the pound to trade around 1.32 by the end of this quarter and about 1.35 in 12 months, which implies some recovery next year.
Investing.com’s analysis highlights the levels traders are watching. On the downside, the 2026 low at 1.3166 is the main support; it says a sustained hold in the dollar index above 103.08 would push the pair towards that level. On the upside, it flags 1.3274 and then 1.3470, and says a drop in the dollar index below 102 could open a move back above 1.33. For context, the pair’s 52-week high was 1.3847 in late January.
For newer traders, it helps to know that a move from 1.3213 to 1.3166 is 47 pips. Our guide to what a pip is in forex shows what that means in money at different lot sizes.
How did WiseProp traders trade GBP/USD this week?
The week was close to balanced, but Friday was not. From Monday 9 to Friday 13 November, 154 trades were placed on WiseProp Trader in GBP/USD by 24 traders, with 87 buys and 67 sells. On Friday, as the pound slid to mid-October lows, 22 of the 24 GBP/USD trades were sells, a sharp turn towards following the dollar’s strength.
What should GBP/USD traders watch next?
- Fed speakers and US data that could firm up, or soften, December hike pricing.
- UK inflation and wage data, which will shape the Bank of England’s 17 December decision.
- The dollar index around 103, which Investing.com treats as a pivot for the pair.
- The 2026 low at 1.3166 and resistance around 1.3274.
For more currency coverage, visit our forex news section.
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This article is for education and information only and is not financial advice. Figures are as reported by the sources linked above.
