Cautionary Statement Regarding Forward-Looking Information

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "expect," "intend," "plan," "believe," "seek," "outlook" and "estimate" and other similar words. Forward-looking statements are based upon our current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. Various factors may cause our actual results to differ materially from those expressed in our forward-looking statements. These factors include fluctuations in the price of the British Pound Sterling, as the value of the Shares relates directly to the value of the British Pounds Sterling held by the Trust and price fluctuations could materially adversely affect an investment in the Shares. Readers are urged to review the "Risk Factors" section contained in the Trust's most recent annual report on Form 10-K for a description of other risks and uncertainties that may affect an investment in the Shares.

Neither Invesco Specialized Products, LLC (the "Sponsor") nor any other person assumes responsibility for the accuracy or completeness of forward-looking statements contained in this report. The forward-looking statements are made as of the date of this report, and will not be revised or updated to reflect actual results or changes in the Sponsor's expectations or predictions.

Overview/Introduction

The Invesco CurrencyShares® British Pound Sterling Trust (the "Trust") is a grantor trust that was formed on June 8, 2006. The Shares began trading on the New York Stock Exchange under the ticker symbol "FXB" on June 26, 2006. The primary listing of the Shares was transferred to NYSE Arca, Inc. ("NYSE Arca") on October 30, 2007. The Trust issues shares (the "Shares") in blocks of 50,000 (a "Basket") in exchange for deposits of British Pound Sterling and distributes British Pound Sterling in connection with the redemption of Baskets.

The investment objective of the Trust is for the Shares to reflect the price in USD of the British Pound Sterling plus accrued interest, if any, less the expenses of the Trust's operations. The Shares are intended to offer investors an opportunity to participate in the market for the British Pound Sterling through an investment in securities. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding the British Pound Sterling. The Shares are bought and sold on NYSE Arca like any other exchange-listed security. The Shares are backed by the assets of the Trust, which does not hold or use derivative products. The Trust is a passive investment vehicle and does not have any officers, directors or employees. The Trust does not engage in any activities designed to obtain profit from, or ameliorate losses caused by, changes in the price of the British Pound Sterling. Investing in the Shares does not insulate the investor from certain risks, including price volatility. The value of the holdings of the Trust is reported on the Trust's website, www.invesco.com/etfs, each business day.

Definition of Net Asset Value

The Trustee calculates, and the Sponsor publishes, the Trust's Net Asset Value ("NAV") each business day. To calculate the NAV, the Trustee adds to the amount of British Pounds Sterling in the Trust at the end of the preceding day accrued but unpaid interest, if any, British Pounds Sterling receivable under pending purchase orders and the value of other Trust assets, and subtracts the accrued but unpaid Sponsor's fee, British Pounds Sterling payable under pending redemption orders and other Trust expenses and liabilities, if any. The NAV is expressed in USD based on the British Pound Sterling/USD exchange rate as determined by The WM Company at 4:00 PM (London time / London fixing) (the "Closing Spot Rate") on each day that NYSE Arca is open for regular trading. If, on a particular evaluation day, the Closing Spot Rate has not been determined and announced by 6:00 PM (London time), then the most recent Closing Spot Rate is used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for the valuation.

The Trustee also determines the NAV per Share, which equals the NAV of the Trust divided by the number of outstanding Shares. The NAV of the Trust and the NAV per Share are published by the Sponsor on each day that NYSE Arca is open for regular trading and are posted on the Trust's website, www.invesco.com/etfs.




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Movements in the Price of the British Pound Sterling

The investment objective of the Trust is for the Shares to reflect the price in USD of the British Pound Sterling plus accrued interest, if any, less the expenses of the Trust's operations. The Shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding British Pounds Sterling. Each outstanding Share represents a proportional interest in the British Pounds Sterling held by the Trust. The following chart provides recent trends on the price of the British Pound Sterling. The chart illustrates movements in the price of the British Pound Sterling in USD and is based on the Closing Spot Rate:





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NAV per Share; Valuation of the British Pound Sterling

The following chart illustrates the movement in the price of the Shares based on (1) NAV per Share, (2) the "bid" and "ask" midpoint offered on NYSE Arca and (3) the Closing Spot Rate, expressed as a multiple of 100 British Pounds Sterling:





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Liquidity

The Sponsor is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to the Trust's liquidity needs. The Trust's Depository, JPMorgan Chase Bank, N.A., London Branch, maintains two deposit accounts for the Trust, a primary deposit account that may earn interest and a secondary deposit account that does not earn interest. Interest on the primary deposit account, if any, accrues daily and is paid monthly. The interest rate in effect as of June 30, 2020 was an annual nominal rate of 0.00%. The following chart provides the daily rate paid by the Depository since June 30, 2015:





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In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor's fee. Each month the Depository deposits into the secondary deposit account accrued but unpaid interest, if any, and the Trustee withdraws British Pounds Sterling from the secondary deposit account to pay the accrued Sponsor's fee for the previous month plus other Trust expenses, if any. When the interest deposited, if any, exceeds the sum of the Sponsor's fee for the prior month plus other Trust expenses, if any, the Trustee converts the excess into USD at the prevailing market rate and distributes the USD as promptly as practicable to Shareholders on a pro-rata basis (in accordance with the number of Shares that they own). The Trust did not make any distributions during the quarter ended June 30, 2020.

Critical Accounting Policies

The financial statements and accompanying notes are prepared in accordance with U.S. GAAP. The preparation of these financial statements relies on estimates and assumptions that impact the Trust's financial position and results of operations. These estimates and assumptions affect the Trust's application of accounting policies. In addition, please refer to Note 3 to the financial statements of the Trust for further discussion of the Trust's accounting policies and Item 7 - Management's Discussions and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies on Form 10-K for the year ended December 31, 2019.

Results of Operations

During the six months ended June 30, 2020, an additional 350,000 Shares were created in exchange for 33,913,843 British Pounds Sterling and 700,000 Shares were redeemed in exchange for 67,832,916 British Pounds Sterling. In addition, 111,868 British Pounds Sterling were withdrawn to pay the portion of the Sponsor's fee that exceeded the interest earned. As of June 30, 2020, the number of British Pounds Sterling owned by the Trust was 92,013,904, resulting in a redeemable capital Share value of $113,656,342. During the year ended December 31, 2019, an additional 1,250,000 Shares were created in exchange for 121,214,247 British Pounds Sterling and 1,050,000 Shares were redeemed in exchange for 101,821,260 British Pounds Sterling. In addition, 54,267 British Pounds Sterling were withdrawn to pay the portion of the Sponsor's fee that exceeded interest earned. As of December 31, 2019, the number of British Pounds Sterling owned by the Trust was 126,044,845, resulting in a redeemable capital Share value of $166,971,382.



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A decrease in the Trust's redeemable capital Share value from $166,971,382 at December 31, 2019 to $113,656,342 at June 30, 2020, was primarily the result of a decrease in the number of Shares outstanding from 1,300,000 at December 31, 2019 to 950,000 at June 30, 2020, coupled with a decrease in the Closing Spot Rate from 1.3248 at December 31, 2019 to 1.2356 at June 30, 2020.

Interest income decreased from $115,069 for the three months ended June 30, 2019 to $0 for the three months ended June 30, 2020, and decreased from $229,770 for the six months ended June 30, 2019 to $105,533 for the six months ended June 30, 2020, attributable primarily to a decrease in the annual nominal interest rate paid by the Depository, as set forth in the FXB Daily Rate chart above.

The Sponsor's fee accrues daily at an annual nominal rate of 0.40% of the British Pounds Sterling in the Trust. Due primarily to a decrease in the weighted-average British Pounds Sterling in the Trust, the Sponsor's fee decreased from $131,507 for the three months ended June 30, 2019 to $121,878 for the three months ended June 30, 2020. Due primarily to an increase in the weighted-average British Pounds Sterling in the Trust, the Sponsor's fee increased from $261,555 for the six months ended June 30, 2019 to $274,375 for the six months ended June 30, 2020. The only expense of the Trust during the three and six months ended June 30, 2020 and 2019 was the Sponsor's fee.

The Trust's net comprehensive loss for the three months ended June 30, 2020 was $121,878 due to the Sponsor's fee of $121,878 exceeding interest income of $0. The Trust's net comprehensive loss for the three months ended June 30, 2019 was $16,438 due to the Sponsor's fee of $131,507 exceeding interest income of $115,069. The Trust's net comprehensive loss for the six months ended June 30, 2020 was $168,842 due to the Sponsor's fee of $274,375 exceeding interest income of $105,533. The Trust's net comprehensive loss for the six months ended June 30, 2019 was $31,785 due to the Sponsor's fee of $261,555 exceeding interest income of $229,770.

Cash dividends were not paid by the Trust for the three and six months ended June 30, 2019 and the three and six months ended June 30, 2020, as the Trust's interest income did not exceed the Trust's expenses during those periods.

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