The current market bias for the GBP to SEK exchange rate is range-bound.
The first key driver is the interest rate differential. The Bank of England has indicated a cautious approach to future rate cuts, while the Riksbank maintains a steady policy rate. This divergence keeps the pound and krona closely matched. A second driver is the UK’s economic outlook; inflation is projected to slow, which could lead to further cuts from the BoE. In contrast, Sweden's GDP growth is expected to rise, providing a supportive backdrop for the SEK.
In the near term, the GBP to SEK rate is likely to remain stable, trading within a limited range, reflecting movements around the recent average. Upside risks could emerge if UK retail sales rebound strongly, which may support the pound. Conversely, if the Riksbank shifts its stance more aggressively towards rate hikes, this could strengthen the SEK against the GBP, altering the exchange dynamics.