HSBC Research expects GBP/USD to move lower over the next month.

"We think GBP/USD is likely move lower, and the reason is simple. The forces that typically support GBP are fading, while the headwinds are getting louder. 

First, the Fed's shift on 17 June matters because it changes the direction of travel for relative rates. Chair Warsh is running a more hawkish regime, with a clearer focus on getting US inflation back to 2% for the first time in more than five years. 

The second risk is that fiscal concerns re-emerge as a market theme. In the Autumn budget, Chancellor Reeves increased the fiscal buffer to GBP22bn. But buffers are only comforting if they stay intact, and the early signs are that it is already being eroded," HSBC notes.

"Politics is the third headwind.  we flagged the Makerfield by-election (18 June) as a key risk event... Burnham may be constrained by fiscal realities on one hand, but he's also promising change on the other. Markets will now wait for concrete policy proposals.

With Warsh's Fed pulling relative rates against GBP, fiscal headroom looking less secure, and politics adding uncertainty, we expect GBP-USD to drift lower over the next month," HSBC adds.