The GBP to INR exchange rate has recently displayed stability, trading near 30-day highs at approximately 118.4, just above its three-month average. Analysts note that the pair has remained within a relatively narrow range of 4.0%, fluctuating between 115.5 and 120.1.
Sentiment surrounding the British pound is increasingly bearish, primarily due to forecasts indicating a significant slowdown in UK economic growth, with KPMG projecting an expansion of only 1% in 2026. This outlook has contributed to a muted performance for the pound as concerns mount over rising unemployment and a decline in consumer sentiment.
The upcoming UK budget on November 26 has further pressured the GBP. Investors are wary of potential tax hikes and anticipated interest rate cuts from the Bank of England, which may diminish the currency's appeal. In this context, the Office for Budget Responsibility's expected downward revision of productivity forecasts signals a challenging fiscal outlook, with a potential £20 billion budget shortfall.
The pound's recent decline against major currencies, including the US dollar and euro, can be traced back to these fiscal uncertainties. Recent data shows the GBP has weakened to multi-month lows about the dollar and over two-year lows against the Euro. Analysts expect the Bank of England may cut interest rates soon, which could intensify downward pressure on the pound.
On the other side of this currency pair, the Indian rupee has faced considerable challenges, recently hitting a record low of 88.62 against the US dollar. This depreciation has been driven by reduced foreign equity inflows and heightened importer demand for dollars. The Reserve Bank of India's interventions, including expanding short dollar forward positions, aim to stabilize the rupee, but ongoing issues such as weak manufacturing exports and a narrowing policy rate differential with the US continue to exert pressure on the currency.
As both currencies navigate their respective challenges, the GBP/INR exchange rate remains at a critical juncture, influenced by fiscal policies and monetary decisions in the UK and economic conditions in India. The outlook suggests that businesses and individuals should stay vigilant regarding currency movements to optimize their international transactions.
