Economists at HSBC expect the GBP/USD pair to head gradually lower but a big collapse is unlikely.

Some near-term downside for the GBP

“We look for some near-term downside for the GBP, amid vulnerable risk appetite and a dovish 50 bps hike by the Bank of England (BoE) at its 15 December meeting.”

“The structural concerns which drove October’s lurch lower in GBP/USD are less evident. The UK’s fiscal confidence has been regained with the Autumn budget, and the UK’s external imbalance is also showing some signs of improvement, notably for visible trade.” 

“With all factors being considered, we are looking at a correction lower in GBP/USD, rather than a fresh collapse, over the near term.”