The GBP to INR exchange rate is currently trending bullish.
Three key drivers influencing this trend are the Bank of England's (BoE) interest rate signals, which suggest a slower pace of rate cuts, a divergence from the U.S. Federal Reserve's expected cautious approach. The UK’s inflation is projected to decline to around 3.5%, impacting monetary policy decisions further. Meanwhile, retail sales growth may provide additional support to the pound if the latest figures show expected improvement.
In the near term, the GBP to INR is likely to fluctuate within a stable range, reflecting recent highs while remaining a few percentage points above its three-month average.
An upside risk could arise from unexpected improvements in the UK economy that prompt a shift in monetary policy, while a downside risk lies in the potential for deeper-than-anticipated cuts by the BoE due to incoming fiscal pressures, which could weaken the pound further against the rupee.