Currency news / September 19, 2025

Sterling rout as UK borrowing blows past forecasts

3 min read Michael Rimmer

Michael RimmerSeptember 19, 2025

Market snapshot:

GBP slides as government borrowing blows past forecasts
CAD weakens as markets digest BoC's dovish tone
BoJ stuns markets announcing to offload its ETF holdings

Yesterday's currency recap

BoE held interest rates at 4%, as expected. It also announced it would slow its quantitative tightening programme, relieving pressure on Gilt markets. GBP was relatively stagnant.

Following interest rate cut Wednesday, CAD was on the backfoot due to the BoC's dovish tone and the fall in oil price.

USD remained relatively rangebound following Wednesday’s interest rate decision.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	-0.02%	2.0485
GBPCAD	-0.58%	1.8692
GBPCHF	-0.12%	1.0740
GBPDKK	-0.27%	8.5851
GBPEUR	-0.26%	1.1501
GBPJPY	0.31%	200.55
GBPNOK	0.04%	13.399
GBPNZD	0.75%	2.305
GBPSEK	0.08%	12.6827
GBPUSD	-0.84%	1.3547

*Daily move - against G10 rates at 17:00 BST, 18.09.25
** Indicative rates - interbank rates at 17:00 BST, 18.09.25

Key data points

Currency	Event	Period	Consensus	Previous
GBP	GfK Consumer Confidence	Sep	-19	-17
JPY	Natl CPI YoY	Aug	2.80%	3.10%
JPY	Natl CPI Ex Fresh Food YoY	Aug	2.70%	3.10%
GBP	Public Sector Net Borrowing	Aug	13.0b	1.1b
GBP	Retail Sales Inc Auto Fuel MoM	Aug	0.40%	0.60%
GBP	Retail Sales Inc Auto Fuel YoY	Aug	0.60%	1.10%
GBP	Retail Sales Ex Auto Fuel MoM	Aug	0.70%	0.50%
GBP	Retail Sales Ex Auto Fuel YoY	Aug	1.00%	1.30%
CAD	Retail Sales MoM	Jul	0.00%	1.50%
CAD	Retail Sales Ex Auto MoM	Jul	--	1.90%
JPY	BOJ Target Rate	19-Sep	0.50%	0.50%

Speeches

USD FOMC Member Daly Speaks

What we think

Following yesterday’s interest rate decision, markets have been surprised by the Bank of Japan this morning. Interest rates remained the same, however, Japanese stocks slid as the BoJ unveiled plans to start selling its holdings of ETFs. We also saw an emerging split in the BoJ over the pace of monetary policy normalisation. Markets now anticipate that some BoJ members may vote for a rate hike in upcoming meeting, causing further JPY volatility to occur around meeting times.

GBP was under pressure this morning as the UK government borrowed significantly more than forecast between April and August. While the Office for Budget Responsibility projected borrowing at £72.4bn, actual figures reached £83.8bn over the period.

GBP was sold off, and this highlights the challenge for Labour and Reeves. Budgets can be relatively muted affairs; however, as we saw in 2022 with Liz Truss, they can also cause fireworks. Markets will be increasingly anxious as we approach what is becoming a high-stakes budget for the UK in November.

We specialise in currency guidance

Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.

Have a great day.