Will the Pound Sterling (GBP) and the US Dollar (USD) reach parity before 2030?

The exchange rate between two currencies is influenced by numerous factors including inflation rates, interest rates, public debt, political stability and economic performance among others.

The relative strength of a nation's fiat currency compared to historic levels is often seen as a measure of the success of the country as a whole, even though countries in the past have seen it as advantageous to devalue their currency. The relative strength of a nation's currency compared to peers often provides a talking point if nothing else, and can have a big psychological impact, affecting consumer and business confidence. in practical terms, it can affect individuals and governments alike by affecting their relative purchasing power.

The US dollar and British pound have never achieved parity. In September 2022, it came close, with the pound bottoming at $1.08. The international investment bank Citi reported that the UK risked a confidence crisis in its currency and would find it difficult to finance economic pledges such as tax cuts.

A significant cause of the decline was seen as reckless British government policy. This was seen as affecting investor perception of the UK's fiscal competence.

See Also:

Macrotrends historical chart GBP USD

Investopedia: Why the British Pound Is Stronger Than the U.S. Dollar

CME Group: Seven Factors that Drive the U.S. Dollar-British Pound Rate