Rate differentials · BoE vs Fed · priced as of 12 November 2026
GBP/USD interest rate differential: BoE vs Fed
As of 12 November 2026, the GBP/USD interest rate differential is 0 bp: the BoE's Bank Rate at 4.00% against the Fed's federal funds rate at 4.00%. Markets price the gap at −6 bp in six months; there is no twelve-month figure, because the Fed curve reaches only July 2027.
Over the next six months, markets price the gap to move −6 bp over six months, towards the US dollar. That six-month gap has moved +4 bp in a month.
The rate spread, now and priced ahead
| BoE (GBP) | Fed (USD) | Gap | |
|---|---|---|---|
| Policy rate now | 4.00% | 4.00% | 0 bp |
| Priced in 6 months | 4.60% | 4.66% | −6 bp |
| Priced in 12 months | 4.77% | curve ends July 2027 | n/a |
| 6-month gap a month ago | 4.43% | 4.54% | −10 bp |
The gap is GBP minus USD, in basis points (100 bp is one percentage point). Six and twelve months out is the rate implied after each bank's last meeting on or before that date. Market pricing, not a forecast. Each bank's meeting-by-meeting odds: BoE · Fed.
The carry on GBP/USD
Neither: both banks set 4.00%, so the policy gap is zero and there is no carry between them.
How the gap feeds the exchange rate, and when it does not: rate differentials explained and the carry trade explained.
Questions
What is the GBP/USD interest rate differential?
As of 12 November 2026, the GBP/USD interest rate differential is 0 bp: the BoE's Bank Rate at 4.00% against the Fed's federal funds rate at 4.00%. Markets price the gap at −6 bp in six months; there is no twelve-month figure, because the Fed curve reaches only July 2027.
Is the BoE–Fed gap priced to widen or narrow?
Markets price the gap to move −6 bp over six months, towards the US dollar, from 0 bp now to −6 bp. A month ago (13 October) the same six-month gap was priced at −10 bp, so it has moved +4 bp since. That is market pricing, not a forecast.
Which side of GBP/USD has the carry?
Neither: both banks set 4.00%, so the policy gap is zero and there is no carry between them.
Where does this pricing come from?
Each bank's priced path comes from the market instrument behind it: Exchange-traded futures, WatchTower model for BoE, Exchange-traded futures for Fed. The rate six or twelve months out is the one implied after the last meeting on or before that date. The month-ago figure is from our daily snapshot of the same curves.
More on GBP/USD: GBP/USD analysis · GBP/USD retail sentiment · GBP/USD seasonality · British Pound outlook · British Pound COT positioning · BoE rate expectations · UK economic surprises · US Dollar outlook · US Dollar COT positioning · Fed rate expectations · US economic surprises
Other rate differentials: EUR/USD −150 bp · USD/JPY +275 bp · USD/CHF +400 bp · AUD/USD +85 bp · USD/CAD +150 bp · NZD/USD −125 bp · EUR/GBP −150 bp · GBP/JPY +275 bp · GBP/CHF +400 bp · GBP/AUD −85 bp · all 28
In WatchTower Terminal, the Rate spread panel draws the GBP/USD gap against the price. Nothing here is financial advice.