GBP has little chance of stability. Overview for 31.05.2023

The British pound sterling remains under pressure against the US dollar. The current GBPUSD quote is 1.2385.

Previously published statistics showed that business confidence in the UK dropped for the first time in three months in May. The Lloyds Bank Business Barometer reflected a decline of 28%. This is because higher inflation has deteriorated the assessment of the economy by businesses. Observers assessed the results of a survey of 1,200 British companies with a minimum turnover of 250,000 GBP.

The survey, conducted by Lloyds, reflects the expectation of a further rise in consumer prices. This, in turn, creates grounds for the Bank of England to raise the interest rate.

Admittedly, the UK has managed to avoid a slump in the GDP and an economic recession, which shows that the economic system is sufficiently resilient. In the long term, this could provide support to the British pound.

The pound is locally affected by the strong USD. Until tension around the issue of the US public debt limits eases, this factor will remain relevant.