The exchange rate forecast for GBP to AED has seen significant volatility, particularly following recent fiscal announcements and economic developments in the UK. Analysts noted that the pound has recently firmed slightly due to the unveiling of the UK autumn budget, which ended a period of uncertainty and provided upwardly revised growth forecasts for 2025. However, concerns remain regarding the high tax burden, which could weigh on the UK economy and thus affect the GBP negatively.
Recent reports indicated that investor sentiment toward the GBP has turned bearish, particularly with the upcoming UK budget and potential interest rate cuts by the Bank of England. As of November 6, 2025, the pound was trading at multi-month lows against major currencies, driven by fears of a £20 billion budget shortfall and weakening productivity forecasts. This has resulted in heightened expectations that the Bank of England will reduce interest rates soon, further eroding the currency's appeal. The recent decline marks a stark contrast to the pound's performance earlier in the month, which had briefly rallied post-budget announcement.
Against the AED, the GBP is currently near 14-day highs at 4.8637, which is just 0.8% below its three-month average. This indicates a relatively stable trading range between 4.7817 and 5.0120 over recent weeks, despite overarching weakness in the GBP relative to other currencies.
On the other hand, the AED has shown strength due to positive economic developments, including a successful currency swap agreement with Turkey and a recent interest rate cut by the UAE Central Bank, which has enhanced investor confidence in the UAE markets. While the AED has appreciated against several Asian currencies, there is ongoing optimism that these moves will support the AED's position in the market.
Overall, the GBP/AED exchange rate will likely continue to be influenced by upcoming fiscal strategies in the UK and the evolving monetary policy landscape in the UAE. Currency experts suggest that businesses and individuals engaged in international transactions should closely monitor these developments for potential impacts on their forex strategies.
