Comparing the dynamics of financial and economic conditions in the United States and the United Kingdom may provide insight into the prospects for the GBPUSD currency pair.
The US GDP growth rate is projected to slow from 1.8% in 2025 to 1.5% in 2026 due to import tariffs, high inflation, and tight monetary policy. In contrast, in the UK, this indicator is expected to hold at 1.3% in both 2025 and 2026. While the latter figure is better than that of many other developed countries, growth remains constrained by global uncertainty and high interest rates.
Regarding inflation, the US report is likely to stay above the Federal Reserve's (Fed) target of 2% until 2027. Meanwhile, the UK’s Consumer Price Index (CPI) is expected to decline to 2%, the figure set by the Bank of England (BoE) as early as mid-next year.
The US labor market will continue to weaken, with the unemployment rate rising to 4.5% in 2026. The situation in the UK is more stable, although jobs growth is slowing. The unemployment rate remains relatively low.
The issue of public debt is acute in both countries. In the US, it continues to rise, increasing trader concerns and posing risks to long-term fiscal sustainability. The UK also has a high level of debt, but forecasts point to a more pronounced stabilization trend. However, high interest rates complicate this task.
The US current account deficit is shrinking, improving its competitiveness on the global stage. In the second country, the same indicator remains high, making its economy vulnerable to external shocks and dependent on inflows of foreign capital.
Although the US GDP is larger and stronger, the UK is showing more positive near-term dynamics. While America faces challenges, such as slowing economic growth, high inflation, and ballooning public debt, the European country is heading toward greater stability despite its elevated current account deficit.
In the course of the next 1–2 years, financial and economic conditions in the UK appear more favorable than those of the US. Under this scenario, the GBPUSD pair is expected to strengthen toward the upper limit of its current range at 1.3780.
The overall recommendation is to open long positions on GBPUSD. Profits should be taken at the level of 1.3780. Stop Loss could be set at 1.3040.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
