The GBP to PLN exchange rate is currently facing significant downward pressure, reflecting broader economic uncertainties in the UK. Recent GDP figures indicated a modest growth of just 0.1% in the third quarter, which has led analysts to predict potential interest rate cuts by the Bank of England (BoE) in December. The approaching Autumn budget, set to be delivered on November 26, has caused investor sentiment to turn negative, with concerns surrounding potential tax increases and fiscal shortfalls influencing the currency's performance. Expectations of rate cuts are dampening the pound's appeal as it trades at multi-month lows against major currencies, including reaching near 90-day lows at around 4.7841 PLN, approximately 2.0% below the three-month average of 4.8842 PLN.
Similarly, developments in Poland, particularly regarding monetary policy and economic indicators, are also impacting the PLN’s performance. The National Bank of Poland (NBP) had previously reduced its base rate in response to declining inflation and economic slowdown, though policymakers stress this should not indicate a broader easing cycle. While Poland has experienced a reduction in annual inflation, political changes, including the election of President Karol Nawrocki and his veto powers, alongside geopolitical tensions, have introduced uncertainties that may also affect investor confidence in the zloty.
Overall, the GBP’s recent struggles against the PLN seem set to persist amidst these economic challenges and fiscal concerns. Analysts suggest that unless there is a significant shift in either monetary policy or a stabilization of political and economic conditions, the pound could remain susceptible to further losses against the zloty in the near term.
