ING Predicts GBP Fall Towards €1.15 Despite Strong GDP Growth

The Pound Sterling has seen gains due to strong GDP growth, but analysts at ING still expect it to fall towards €1.15 in Q4 2026. The GBP/EUR exchange rate closed at 1.1663 on Friday, up 0.24% from the day before.

ING's Francesco Pesole acknowledges that the monthly GDP growth prints have not had a significant impact on Bank of England decisions. ING expects no Bank of England hike, which would leave the Pound Sterling without its expected yield support.

The ECB's inflation outlook is also pointing towards further tightening. Its projections put inflation at 2.5% in 2027 and 2.1% in 2028, above the 2% target in both years.

ING sees this as an argument for additional interest rate increases by the ECB. However, they retain their fourth-quarter currency calls, with a GBP/EUR target of 0.87, which converts to approximately €1.1494.