Pound-to-Euro Forecast Suggests Sterling May Lose Ground Through 2027

The August survey by Exchange Rates UK Research of major investment banks suggests that despite sterling's strong performance this year, the British Pound-to-Euro exchange rate is expected to fall below its current level in the coming quarters.

The median forecast predicts a depreciation of the pound against the euro from around 1.1674 to approximately 1.163 in Q3 2026 and 1.149 in Q4, with this trend persisting through much of 2027.

According to the survey, which includes 20 institutions, most banks expect sterling to lose some ground and settle around 1.15 through 2027, with a few institutions such as Bank of America forecasting further strength for the pound.