GBP/EUR Exchange Rate May Fall Amid Strong Pound Performance
Exchange Rates UK Research's latest August survey of major investment banks indicates that the British Pound-to-Euro exchange rate may surrender some of its gains this year. Despite sterling's strong performance in 2026, with a year-to-date gain of approximately 1.85%, the median forecast falls to around 1.163 in Q3 and 1.149 in Q4.
The central bank forecast remains centered around the mid-1.10s, but individual bank projections range widely from 1.0870 to 1.1905. Bank of America forecasts GBP/EUR at 1.1905 through the first half of 2027 before rising above 1.20 later in the year.
Meanwhile, sterling has rallied strongly this year, with a 2026 high around 1.183 reached during July. The current market near 1.167 is above both its 20-day and 50-day moving averages, but most institutions expect sterling to lose some ground and settle around 1.15 through 2027.