GBPUSD decline accelerates amid weak economic data

The GBPUSD pair continues to weaken amid soft inflation data and expectations of interest rate cuts by the Bank of England, with the rate currently at 1.3337. Discover more in our analysis for 22 October 2025.

GBPUSD forecast: key trading points

• Annual inflation in the UK remained at 3.8% in September 2025
• The yield on 10-year UK government bonds has fallen to its lowest level since July
• Markets expect the BoE to begin cutting rates early next year
• GBPUSD forecast for 22 October 2025: 1.3500 and 1.3250

Fundamental analysis

The GBPUSD rate continues to decline for the third consecutive trading session, approaching the key support level at 1.3325.

Annual inflation in the UK remained at 3.8% in September 2025 – unchanged from the previous two months and below the forecast of 4.0%. Against this backdrop, the yield on 10-year UK government bonds fell below 4.5%, reaching its lowest level since July.

Although inflation remains nearly double the BoE’s target of 2.0%, the data has somewhat reassured Chancellor Rachel Reeves. Markets now anticipate that the BoE will start to lower interest rates early next year following Governor Andrew Bailey’s remarks about a cooling labour market and rising unemployment, which has reached 4.8%.

GBPUSD technical analysis

On the H4 chart, the GBPUSD pair shows signs of forming a Head and Shoulders reversal pattern, suggesting a potential end to the decline and the beginning of a bullish correction. The price has approached the key support level at 1.3325, and a successful rebound from this area could strengthen the recovery.

Today’s GBPUSD forecast expects an upward move towards the neckline of the reversal pattern at 1.3465. The Stochastic Oscillator has turned upwards from oversold territory and is nearing the support line, signalling a weakening bearish momentum.

A consolidation above 1.3425 would confirm the likelihood of a reversal pattern implementation and a continued bullish correction.

Summary

The GBPUSD rate remains under pressure due to weak inflation data and expectations of BoE rate cuts. However, technical analysis suggests a high probability of the downtrend ending and a bullish correction beginning, provided the price successfully rebounds from the 1.3325 support level, with a potential target near 1.3465.

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