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The British pound (GBP) to the US dollar (USD) fell sharply when the pandemic broke out, reaching a low of 1.1400 in mid-March 2020. The currency pair recovered and grew steadily during the rest of 2020 and in 2021, reaching a three-year high of 1.4215 last May.But the pair could not keep the profit and has been declining since then.This article discusses the key drivers of the pair and the latest forecasts of analysts for the GBP/USD pair.The recovery of the UK economy, although strong, is not enough to raise the pound sterlingThe pound had an optimistic start to the year: the country's economy grew thanks to a well-thought-out vaccination program against COVID-19 in the UK.Optimism about the UK economy grew even during the first three months of 2021, when restrictions were in effect in the UK.In the period from January to March, the UK economy performed better than economists and the Bank of England expected. UK GDP declined by 1.6% on a quarterly basis, while in February the Bank of England expected a reduction of 4%.The resumption of the economy in the second quarter provided an acceleration of growth. According to the Office for National Statistics, GDP grew by 4.8% in the period from April to June. This is a solid figure that shows that the UK economy is on the mend. Nevertheless, it was slightly below the level of 5%, which the head of the Bank of England, Andrew Bailey, spoke about on August 4 at the last meeting of the Bank of England. As a result of these figures, the pound fell.Thanks to the rapid vaccination program, the UK economic recovery was gaining momentum. But since mid-June, the number of COVID-19 infections has started to rise again, as a more contagious variant of the coronavirus, the Delta strain, has spread rapidly across the country. Despite the fact that there were no new lockdowns in the UK, many enterprises faced staffing problems due to the huge number of people who were told to self-isolate by the national health system application.Concerns about the prospects for the UK economy have recently affected the demand for the pound. But it is worth noting that these fears could be exaggerated, because retail sales grew at the fastest pace in seven years. But the PMI data fell more than expected, from 62.4 in June to 59.6 in July, the lowest value since March.UK inflation continues to riseInflation in the UK is also rising. The combination of rising material costs and fuel prices, as well as a shortage of labor, led to an increase in consumer prices. In June, the consumer price index rose to 2.5%. But in July, this indicator fell more than expected, to 2%. However, the Bank of England still expects inflation to rise to 4% by the end of the year, so some analysts believe that an increase in interest rates may occur sooner rather than later.Ian Stewart, chief economist at Deloitte, said: "If there is not another serious wave of COVID-19 diseases in the winter, and the state of the economy is in line with the forecasts of the Bank of England, then the first rate hike is likely to occur in the spring or early summer of next year."Other analysts believe that the Bank of England may start raising interest rates at the end of 2022. A Reuters poll shows that economists generally expect the central bank to start raising rates in 2023.In general, the UK economy has recovered confidently from the pandemic, and the growth rate remains high, even despite its slight slowdown. But the recovery in the UK was less impressive than in the US, which to some extent explains the weakness of the GBP/USD.The issue of tightening the Fed's monetary policy contributes to the growth of the US dollarThe US also benefited from a strong vaccination program, loosening of isolation bans and strong economic growth in the first half of 2021. Inflation was a particularly hot topic. Consumer prices rose to 5.4% in June, which is higher than in the UK.While the Federal Reserve (Fed) insisted that the increase in inflation was temporary, the US central bank made an unexpected hawkish turn, and this move suggests that two interest rate hikes can be expected as early as 2023, and not in 2024, as previously expected.This is a key moment for the GBP/USD pair, when the pair began a downtrend in mid-June.The market is watching the Fed for clues about the timing of measures to reduce monetary policy.The latest minutes of the Federal Open Market Committee (FOMC) showed that the Fed is increasingly agreeing with the idea of tightening monetary policy, and the bond purchase program may be reduced before the end of the year, which supports the US dollar.Now all attention is focused on the symposium in Jackson Hole, which will be held this week. Federal Reserve Chairman Jerome Powell may give further guidance on the timing of the Fed's next step to reduce bond purchases. But the fact that the Economic Forum was transformed into an online event at the last minute hints at further actions. Due to the increase in the number of cases of COVID, the Fed may exercise caution and wait for additional data to appear in the fall. As a result, the GBP/USD pair has grown in recent trading sessions, returning to 1.3700.GBP/USD: prospectsThe GBP/USD exchange rate started this year at 1.3500, rising to a maximum of 1.4215 at the end of May. Since then, the pair has been trending downward, reaching a five-month low of 1.3560 in July.The pair is currently trading below its 50 and 200-day simple Moving Averages (SMA) on the daily chart. The price fluctuates below the multi-month descending trend line. And this is an already formed bearish trend. The Relative Strength Index (RSI), which measures the oversold or overbought nature of an asset, gives mixed signals. He is still in bear territory.Sellers will need to break through the support at 1.3600, which is the minimum of August, and then 1.3560, the minimum of July. Such a move could open the way to the 200-week moving average of 1.3146.The prospects and trend of the GBP/USD pair largely depend on what will happen later this week at the symposium in Jackson Hole on the topic "Macroeconomic policy in an uneven economy". Federal Reserve Chairman Jerome Powell will deliver a speech on Friday.Some analysts expect that Powell will not give specifics about the time of reducing bond purchases in order to maintain flexibility. This can help reduce the demand for the dollar and raise the pound against the US dollar.Ian Lyngen and Benjamin Jeffrey of BMO Capital Markets said: "Investors are waiting for any information about the timing of the Fed's taping announcement, although we suspect that the chairman will leave enough room for ambiguity to provide flexibility, as concerns about the latest wave of the pandemic grow."Patrick Reed, co-founder of Adamis Principle, a trading training consulting company, believes that the Fed will postpone action until next year. He said:"The pound (GBP/USD) is really at the mercy of the Fed and the new taping plan in the fourth quarter… I really think that the Fed will not act this Friday, because the impact of the "Delta" option is worse than the market thinks – from an economic point of view. But I believe that the tightening of monetary policy will occur in the first quarter of 2022, so the pound (GBP/USD) will fluctuate in the range between 1.3580 and 1.4240, and by the first quarter of 2022 it will fall to 1.31."Meanwhile, Goldman Sachs analysts have increased the probability of taping in November compared to December. The investment bank expects the Fed to reduce purchases by $15 billion at the November and subsequent meetings. Goldmans estimates the probability of an official announcement of taping in November at 45% compared to 25%, while reducing the probability of December to 35% from 55%.While the strengthening of the prospects for tightening monetary policy supports the higher value of the US dollar, the Goldman Sachs forecast for the GBP/USD pair indicates a weaker US dollar in the medium term. Analysts believe that the GBP/USD pair will trade at 1.41 in three months and 1.45 in six months. The key level will be 1.44.In his analysis of GBP/USD, David Madden, market analyst at Equiti Capital, also noted that the Fed's next move will be a key factor determining the dynamics of the currency pair:"The GBP/USD pair has been growing for the past 18 months, but recently it has pulled back a little amid talk that the Fed may reduce its bond-buying scheme at the end of this year.Despite the fact that the UK economic recovery has been impressive, the same is true in the US, and it seems that the Fed is ahead of the Bank of England on the path of tightening monetary policy. This may limit the bullish growth of the pound. By the end of the year, the GBP/USD pair may reach the level of 1.4500."As for the more distant future, the pair's prospects after 2021 remain optimistic. The Wallet Investor website says that the GBP/USD exchange rate will rise in the next 12 months. In its annual forecast for GBP/USD, the service indicates that the pair may close August 2021 at the level of 1.3872. The long-term five-year forecast for GBP/USD predicts that the exchange rate will continue to rise to 1.4850.