The exchange rate forecast for GBP to TWD has become increasingly cautious amid budget concerns and recent economic developments in the UK. As of now, the GBP trades at 41.08 TWD, which is 2.2% above its three-month average of 40.2 TWD, reflecting a relatively stable range of 39.35 to 41.49 TWD over the past period. Analysts note that ongoing uncertainty regarding fiscal policies, especially with the upcoming UK budget announcement on November 26, is likely to keep the pound under pressure.
Investors are particularly worried that the Chancellor, Rachel Reeves, may need to introduce significant tax increases or spending cuts to address public finance gaps. This concern has been compounded by rising long-term borrowing costs, with the 30-year gilt yield reaching a 25-year high, which indicates apprehension over the UK’s fiscal discipline and debt sustainability. Experts believe these factors could lead to a weaker GBP in the short term.
Furthermore, the outlook for the Bank of England's interest rates plays a crucial role in shaping the GBP's trajectory. HSBC has revised its forecasts to suggest that rates may remain steady until April 2026 due to persistent inflation, while Deutsche Bank anticipates a potential rate cut in December. This divergence in expectations around monetary policy could influence the GBP’s exchange rate dynamics in relation to the TWD.
Conversely, the TWD has been experiencing pressures tied to capital control measures enforced by Taiwan’s central bank aimed at managing its recent sharp appreciation, which poses challenges for Taiwan’s export-driven economy. The central bank's warnings to foreign investors regarding compliance with capital controls highlight concerns over currency volatility impacting domestic financial stability.
Overall, the interplay of UK economic indicators and fiscal policies, alongside Taiwan’s capital control measures and international trade relations, will be crucial in determining the future direction of the GBP to TWD exchange rate. As developments unfold, investors should stay alert to updates from analysts and experts for shifts that could impact their international transactions.
