The GBP to AED exchange rate is currently range-bound, recently trading at near 14-day lows.
Key drivers influencing this stability include interest rate divergence, with the Bank of England expected to lower rates amid cooling inflation, while the UAE benefits from a strong economic growth forecast of 5.3% in 2026, supported by non-hydrocarbon sectors. Additionally, the UK faces fiscal concerns that could add pressure on the pound, especially with potential trade slowdowns due to new tariffs.
In the near term, the GBP to AED rate is likely to remain within a stable range, roughly consistent with its recent trading patterns.
An upside risk may arise if the UAE economy outperforms expectations, driving demand for the Dirham. Conversely, the downside risk could stem from further rate cuts by the Bank of England, which would likely weaken the GBP against the AED.