The recent forecasts for the GBP to AED exchange rate highlight a generally supportive outlook for the British pound, despite some underlying concerns. Analysts point to a divergence between the Bank of England (BoE) and other major central banks, suggesting that GBP may benefit from relatively higher interest rates, especially as the BoE is expected to maintain its policy stance through the remainder of the year to counter ongoing high inflation. HSBC has revised its forecasts, predicting that BoE rates will remain steady until at least April 2026, while Deutsche Bank anticipates a possible cut by December 2025. This prolonged stability could reinforce the pound's appeal against other currencies.
In the UK, the latest jobs report may influence GBP sentiment, especially if it indicates further cooling of the labor market. Additionally, concerns regarding the UK’s fiscal discipline, highlighted by surging long-term borrowing costs and a potential budget announcement scheduled for November, are factors that could impact the pound's strength.
On the other hand, developments concerning the UAE Dirham (AED) indicate that it has depreciated by approximately 8% against the GBP because of recent U.S. tariffs. This depreciation has made the Dubai property market significantly more attractive to British investors, resulting in a notable year-on-year increase in property purchases. Despite this, the UAE economy remains resilient due to strong consumer spending and foreign investment, although there are concerns about the effects of a weaker US dollar on domestic inflation.
Currently, the GBP to AED exchange rate hovers near 60-day highs at approximately 4.9957, reflecting a modest increase of 0.7% from its three-month average of 4.9586. The exchange rate has remained relatively stable within a range of 4.8506 to 5.0490 over recent months, which suggests that while there are pressures both supporting and challenging the pound, the overall trend is cautiously optimistic for GBP holders looking to exchange into AED. Analysts will be watching for any further economic data from the UK and developments in the UAE, which are likely to influence future market movements.
