The British pound (GBP) has shown stability in recent weeks, primarily following the Bank of England's (BoE) decision to hold interest rates steady. This move has led analysts to believe that the risk of drastic policy shifts is reduced for the remainder of the year, despite some indications of future rate cuts. HSBC now projects that interest rates will remain unchanged until at least April 2026, while Deutsche Bank suggests a possible cut as early as December 2025, indicating divergent views among banks regarding the impact of persistent inflation on monetary policy.
Investor sentiment is also influenced by apprehensions surrounding UK fiscal policies. Rising long-term borrowing costs, evident through a significant increase in the 30-year gilt yield, have prompted concerns over the sustainability of UK debt. This economic backdrop could exert pressure on the pound, particularly ahead of the upcoming budget announcement scheduled for November 26, where potential tax increases may further affect sentiment regarding the currency.
In terms of performance, the pound has managed to maintain a firm position against the U.S. dollar, benefiting from a recent weak jobs report in the United States. However, when examining the GBP to Saudi riyal (SAR) exchange rate, the pound is trading near 14-day lows around 5.0527, which hovers just below its three-month average. This reflects a period of relative stability for the GBP/SAR pair, which has fluctuated within a modest range of 4.1% from 4.9539 to 5.1550.
Overall, while current forecasts indicate a cautiously optimistic outlook for the pound amid volatile conditions, external factors, including fiscal policy adjustments and economic stability, will likely play a crucial role in shaping the GBP's performance against the SAR in the near term.
