British Pound to Euro Forecast: Sterling Weak, GBP/EUR Now Below 1.14

Modified: Tuesday, 28 October 2025 19:29 BST - Written by David Woodsmith

STORY LINK British Pound to Euro Forecast: Sterling Weak, GBP/EUR Now Below 1.14

UPDATE – The Pound to Euro (GBP/EUR) exchange rate extended its decline on Tuesday, slipping below the 1.14 level as traders increased bets on a Bank of England rate cut before year-end. Despite a generally positive global risk backdrop, Sterling remained under pressure amid domestic fiscal concerns and softer policy expectations.

Analysts warn that if UK policymakers strike a more dovish tone next week, GBP/EUR could test key support around 1.1350 in the near term.

GBP/EUR remained under pressure at the start of the week, holding close to one-month lows after Friday’s sharp slide to 1.1430. A modest rebound toward 1.1460 on Monday failed to gather momentum as renewed Bank of England (BoE) rate cut speculation kept Sterling on the defensive.

GBP/EUR Forecasts: Sterling Struggles to Rebound Ahead of ECB and BoE Decisions

Risk appetite improved globally on Monday, helped by optimism over potential progress in US–China trade relations, but the Pound struggled to benefit. Investors stayed cautious ahead of the late-November UK Budget and next week’s BoE policy meeting.

In the Euro area, sentiment improved after the German IFO index rose to 88.4 in October from 87.7, exceeding expectations. The expectations component strengthened to 91.6, its highest in over two years, offsetting a slight dip in current conditions.

ING commented; “While energy prices should push inflation down in the coming months, the PMI doesn’t signal many underlying deflationary pressures.”

It added; “All of this confirms that the European Central Bank is still in a ‘good place’. While we cannot entirely exclude any additional rate cuts, the PMI strongly points to stable rates for some time to come.”

The European Central Bank will announce its latest policy decision on Thursday, with Danske Bank expecting no changes: “We expect the ECB to leave the deposit rate unchanged at 2.00% on 30 October. Data has been close to expectations since the September meeting, so we see no shift in the ‘meeting-by-meeting’ stance.”

For those planning Euro transfers or purchases, recent Sterling volatility shows how quickly market sentiment can turn before central bank announcements. You can compare live rates and lock in favourable options via our best exchange rates
guide before this week’s ECB and BoE events.

Domestically, UK rate expectations remain uncertain. While markets broadly expect the BoE to hold rates at 4.00% in November, softer inflation data have raised doubts.

Rabobank noted; “We think the Bank of England will hold rates at 4.00% at its November 6 decision, but the MPC’s pivot to genuine data dependence has made each meeting truly ‘live’.”

Overall, the Pound’s muted recovery suggests investors will remain cautious until fresh signals emerge from policymakers — leaving GBP/EUR vulnerable to renewed downside pressure if confidence in the UK policy outlook weakens further.

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TAGS: Pound Euro Forecasts