Published: Wednesday, 12 November 2025 08:00 BST

– Written by


Tim Boyer

STORY LINK Pound-to-Dollar Forecast: GBP/USD Recovery Halts on Dovish BoE Outlook

The British Pound’s recent rebound faltered after disappointing UK jobs data pushed the Pound-to-Dollar exchange rate down toward 1.31, with analysts warning that a softening labour market gives the BoE room to cut rates again next month.

MUFG and ING both see further GBP losses ahead with a December move as increasingly likely.

GBP/USD Forecasts: Recovery Halted

Pound Sterling was hurt on Tuesday by increased speculation of a December Bank of England (BoE) interest rate cut following weaker-than-expected UK jobs data.

The Pound to Dollar (GBP/USD) exchange rate dipped sharply to 1.3120 from highs near 1.3180 ahead of the data with the Pound struggling to secure any benefit from favour able risk conditions and a fresh record high in the FTSE 100 index.

Crucial Pound support remains at 1.30. ING has a year-end GBP/USD forecast of 1.34 as the dollar loses ground.

The UK jobs data was significantly weaker than expected with the unemployment rate increasing to a fresh 4-year high of 5.0% in the three-months to September from 4.8% previously and above consensus forecasts of 4.9%.

The ONS also reported a decline in payrolls of 32,000 for October, matching a final 32,000 retreat for September.

There was also a small net slowdown in underlying wages growth to 4.6% from 4.7%.

According to MUFG; “The data suggests that the downturn in the labour market is getting worse ahead of the Autumn Statement.”

Markets are now more convinced that the BoE will cut rates again in December.

MUFG added; “Loosening labour market conditions should give the BoE more confidence that wage growth will continue to slow dampening upside inflation risks. The weak labour market report supports our forecast for the BoE to cut rates next month.”

There will be potential implications for politics and the budget with pressure for measures to support the jobs market.

Capital Economics UK economist Ashley Webb commented; “The 32,000 fall in payroll employment in October was the eleventh monthly decline over the past year and suggests that businesses continued to trim headcounts after the Chancellor announced the rises in payroll taxes and the minimum wage in last year’s October Budget.”

According to ING; “Now, both inflation and jobs data are starting to point down, and we think the Autumn Budget’s tax hikes will provide the final argument for a cut in December.”

On Monday, the US Senate voted to end the government shutdown and it will now move to the House of Representatives.

Assuming there is a near-term re-opening, there is the potential for some relief surrounding consumer confidence while the focus will switch to postponed data releases with a particular focus on the jobs market.

ING commented; “a resumption of data releases in the US does carry non-negligible downside risks to the dollar. In our view, the latter factors should prevail, as we think markets are underestimating the downside risks for the labour market, US front-end rates and – by extension – the dollar into year-end.”

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TAGS: Pound Dollar Forecasts