Pound to Euro Forecast 2026-2028: Sterling's Gains May Be Short-Lived

The Pound to Euro exchange rate has been trading above where most investment banks expect it to settle over the medium term, according to Exchange Rates UK Research's latest August survey.

With GBP/EUR currently at 1.1694, close to its highest level in more than a year, the majority of banks expect the exchange rate to drift back towards 1.14-1.16 through 2027.

The latest survey suggests sterling's outperformance may moderate, with most banks expecting GBP/EUR to ease back into the 1.12-1.16 region over the next 12 to 24 months.

This follows a strong rally in recent months, with GBP/EUR climbing steadily from around 1.14 in March to almost 1.17 in August, a gain of around 2.5%.