Sterling's Gains May Be Short-Lived, Banks Predict

The Pound-to-Euro exchange rate has been on a tear this year, but investment banks are warning that its gains may be short-lived. According to a survey by Exchange Rates UK Research, the median forecast for GBP/EUR in Q2 2027 is around 1.1494, representing a decline of approximately 1.1% from current levels.

The survey, which polled major investment banks in September, found that while some institutions are bullish on sterling, others are more bearish. The Bank of America and UBS predict GBP/EUR will reach 1.18-1.19 by the end of next year, while ING sees it falling to 1.1236.

The central message from the poll is that banks expect consolidation rather than a major reversal in sterling's appreciation. The median forecast suggests that GBP/EUR settles around 1.15 after spending much of 2026 above that level.