ING Sticks to EUR/GBP Forecast Despite Market Volatility

ING's forecast for the Euro to Pound (EUR/GBP) exchange rate is still pointing towards an increase, despite recent market fluctuations. The rate has climbed to around 0.8573, building on Wednesday's 0.2% advance and pushing back towards the upper end of its August range.

The bank's economists expect no increase in Bank Rate during 2026, while market pricing for 32bp of Bank of England tightening by year-end remains too hawkish. LSEG pricing on Thursday showed just 24.3bp of BoE tightening by December, with a full 25bp increase no longer priced until February 2027.

ING's argument is based on the idea that market expectations for BoE tightening are unwinding, and rates will soon reflect this change. With BoE pricing already moving in ING's direction, 0.8585 is now the near-term test and 0.870 the more consequential one.