The GBP to AED exchange rate is currently range-bound.
The key drivers include the interest rate forecast, as the Bank of England (BoE) is expected to slow the pace of future rate cuts, which may lend support to the pound. In contrast, the UAE's growth outlook for 2026 is strong, projected at 5.3%, which could strengthen the AED. Additionally, concerns around the UK's fiscal policy and decelerating growth may create downward pressure on the pound.
Expect the exchange rate to trade within a stable range, with stability around recent prices expected.
An upside risk could arise if UK retail sales figures show stronger-than-expected growth, indicating resilience in the economy. Conversely, a downside risk is present if the UAE's economic expansion continues to outpace the UK's, which may result in a weaker pound against the dirham.