**Pound to Dollar Forecast: GBP/USD Recovery Halts on Dovish BoE Outlook**
*Original Article by Tim Clayton | Source: CurrencyNews.co.uk – November 12, 2025*
The GBP/USD currency pair, often referred to as “Cable,” has seen its recovery stall amid a notably dovish outlook from the Bank of England (BoE). A blend of UK-centric factors, global risk sentiment, central bank policies, and economic data releases collectively influence Sterling’s current trajectory against the US Dollar. The recent pullback underscores just how responsive the pair is to shifting expectations around interest rates and the macroeconomic landscape. In this in-depth analysis, we examine the pivotal factors shaping GBP/USD, recent price action, and what the future might hold for traders and investors.
### Recent Price Action: Cable’s Recovery Interrupted
Sterling began to claw back ground against the Dollar through early November, building on a sense that global financial conditions may ease. However, this upward momentum abruptly faltered after the Bank of England’s recent policy decision and forward guidance. The GBP/USD pair failed to sustain its gains, descending from its peak near 1.2450—the highest levels seen in several weeks—down to the lower 1.2300s following BoE policy signals seen as clear evidence of dovish intent.
#### Key Observations:
– **Weekly Performance:** Despite earlier strength, Cable lost upward momentum and closed lower over the week.
– **Intraday Dynamics:** Traders saw increased volatility around major data releases and the BoE rate decision, amplifying daily price swings.
### The Bank of England’s Dovish Tilt
At its recent policy meeting, the BoE opted to keep rates on hold at 5.25 percent, matching market expectations. The Monetary Policy Committee (MPC) voted 6-3 to maintain this setting, with three policymakers—Catherine Mann, Jonathan Haskel, and Megan Greene—voting for an increase. While the decision itself was expected, the tone of the BoE’s communication was interpreted as notably dovish.
#### Dovish Signals Highlighted by the BoE:
– **Inflation Trajectory:** The Bank projected a steep fall in headline inflation, potentially dropping to around the 2 percent target by April 2026, from current levels above 6 percent.
– **Forward Guidance:** Governor Andrew Bailey emphasized the need to remain cautious but acknowledged “considerable progress” in reducing inflation.
– **Downside Risks:** The BoE flagged increased downside risks to growth and noted sluggish economic activity.
#### Market Reaction:
– **GBP/USD Moves:** Sterling quickly weakened, indicating investors were reassessing expectations for future rate hikes. The narrative shifted towards the possibility of rate cuts beginning sooner in 2026.
– **Yields and Rate Expectations:** UK gilt yields eased and market-implied rates suggested that traders now see lower-for-longer rates, in contrast to earlier bets for further tightening.
### UK Economic Data: Mixed Backdrop
The UK macroeconomic landscape offers a blend of resilience and challenge, with key economic indicators painting a mixed picture.
#### Growth:
– **GDP:** The latest figures showed flat quarter-on-quarter growth for Q3 2025, suggesting that the UK economy is barely avoiding a recession.
– **PMI Surveys:** Business surveys point to subdued activity levels, especially in construction and manufacturing sectors.
#### Inflation:
– **CPI Data:** Headline inflation, while gradually moderating, remains well above the 2 percent target.
– **Wage Growth:** Despite core inflation pressures fading, elevated pay growth is a concern for policymakers. Average earnings growth is at 6.3 percent, maintaining underlying inflationary pressure.
– **Labour Market:** Signs indicate a slight cooling but not at a pace fast enough to reassure the BoE.
#### Consumer and Retail Sentiment:
– **Retail Sales:** Recent data shows a lackluster performance, reflecting restrained consumer spending due to higher living
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