The exchange rate for GBP to CHF has reached a challenging position, currently trading at around 1.0455, marking a 90-day low and approximately 2.3% below its three-month average of 1.0703. Analysts have noted that the GBP is under significant pressure due to a combination of factors including disappointing UK growth figures, ongoing fiscal concerns, and expectations of interest rate cuts by the Bank of England (BoE). Following the UK’s 0.1% GDP growth reported for Q3 2025, forecasts suggest that further dips in the pound may occur, especially as the UK government prepares for its Autumn budget, which has investors wary of potential tax hikes.
Market sentiment has turned decidedly negative towards the GBP, with options markets reflecting a bearish outlook amid predictions that the BoE may need to lower interest rates down the line. This outlook is compounded by the announcement of a £20 billion budget shortfall expected from revised productivity forecasts by the Office for Budget Responsibility. Consequently, the pound has fallen not only against the CHF but also against major currencies like the US dollar and euro, indicating a broad weakness.
On the other hand, the Swiss franc has been affected by its own economic challenges. The Swiss National Bank (SNB) maintains a zero interest rate policy, prompted by concerns surrounding the impact of new U.S. tariffs on Swiss exports and a recent dip in inflation, which fell to 0.1% year-on-year. Additionally, there have been substantial increases in foreign currency purchases by the SNB to counteract the franking situation, highlighting the central bank's focus on stabilizing the currency amidst external pressures.
Overall, these developments suggest that the GBP to CHF exchange rate may remain under pressure in the near term. Currency experts anticipate that unless there is a significant policy shift or improvement in economic indicators from the UK, the pound could continue to struggle against the stability of the Swiss franc, particularly as the SNB navigates its own economic landscape without resorting to competitive devaluation strategies. Therefore, for businesses and individuals engaged in cross-border transactions, monitoring upcoming budget announcements from the UK and economic indicators from Switzerland will be crucial in managing currency risks effectively.
