Currency news / November 5, 2025

Sterling gets pounded

3 min read Lawrence Kaplin

Lawrence KaplinNovember 5, 2025

Market snapshot:

USD: 5-month highs
EUR: Bystander
GBP: Budget fears

Yesterday's currency recap

Sterling was hit hard yesterday, trading down to 6-month lows versus the USD and 2.5-year lows versus the EUR after UK Chancellor Rachel Reeves unexpectedly delivered an unprecedented pre-budget statement that paved the way for broad tax rises in her upcoming budget, in a bid to avoid a return to austerity. She cited high interest rates as constraint on the economy, and that inflation has been “too slow to come down”. In an effort to pacify the Capital Markets she re-emphasised her commitment to the Labour party’s "fiscal rules". The prospect of a fiscally tight budget saw markets ratchet up the probability of an interest rate cut at Thursday’s Bank of England meeting.

Elsewhere, USD recovery continued, taking the dollar index up to the best levels since May of this year following Fed Chair Powell’s recent cautionary statements regarding markets fully pricing-in another US rate cut this year.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.07%	2.0075
GBPCAD	0.13%	1.8385
GBPCHF	-0.03%	1.0545
GBPDKK	0.02%	8.465
GBPEUR	0.01%	1.1335
GBPJPY	0.01%	200.04
GBPNOK	0.01%	13.085
GBPNZD	-0.09%	2.3045
GBPSEK	0.08%	12.485
GBPUSD	0.07%	1.3025

*Daily move - against G10 rates as of 06:00 GMT, 05.11.25
** Indicative rates - interbank rates as of 06:00 GMT, 05.11.25

Key data points

Currency	Event	Period	Consensus	Previous
EUR	HCOB Services PMI	Oct	52.60	52.60
EUR	HCOB Composite PMI	Oct	n/a	52.20
UK	S&P Services PMI	Oct	51.10	51.10
UK	S&P Composite PMI	Oct	51.10	51.10
US	ADP Employment Change	Oct	24k	-32k
US	ISM Services PMI	Oct	50.70	50.00
US	S&P Services PMI	Oct	55.20	55.20
US	S&P Composite PMI	Oct	54.80	54.80

Today's speeches

ECB’s Villeroy and Nagel
BoE’s Breeden

What we think

Sterling remains vulnerable ahead of Thursday’s Bank of England interest rate meeting.

Following recent weaker UK growth and employment data, the OBR productivity downgrade and yesterday’s pre-budget statement, markets have increased the probability of a BoE interest cut to 40%.

Notably, this still leaves room for further GBP weakness should the BoE cut rates and/or downgrade UK growth prospects.

Elsewhere, the US Government shutdown has entered into its 36 day, making it the longest period on record.

Read more about the BoE's interest rate meeting here - When is the next BoE interest rate decision?

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