Pound to Euro: Consensus Bank Forecasts Point to GBP/EUR Near 1.13

Modified: Saturday, 22 November 2025 17:05 BST - Written by David Woodsmith

STORY LINK Pound to Euro: Consensus Bank Forecasts Point to GBP/EUR Near 1.13

The British Pound to Euro exchange rate's slide to multi-year lows was followed by a modest stabilisation around 1.1340.

Despite diverging views on fiscal risks and the pace of BoE cuts, the broader analyst consensus points to GBP/EUR trading close to 1.1360 over the coming year.

Markets will now look to risk sentiment and policy signals on both sides to test whether this steady-range forecast holds.

GBP/EUR Forecasts: Limited Net Losses on BoE Cuts Rates

The Pound to Euro rate (GBP/EUR) briefly slumped to 30-month lows close to 1.1280 on November 14th before recovering and settling around 1.1340.

There will be fundamental Pound vulnerability, especially with strong expectations that the Bank of England (BoE) will cut rates several times.

Global risk conditions are likely to be crucial with a high risk of Pound losses if conditions deteriorate while Sterling has a greater chance of limited net gains if global conditions are benign.


According to ING the Pound will be vulnerable as the Bank of England continues to cut interest rates. It commented on EUR/GBP; “0.90 looks a conservative upside target, which could be bettered should the UK domestic or external environment deteriorate.” (GBP/EUR losses to at least 1.11).

Danske Bank and Goldman Sachs also have 12-month GBP/EUR forecasts of 1.11.

After initial vulnerability, RBC Capital Markets sees scope for a recovery to 1.15 by the end of next year.

In contrast, UBS sees scope for GBP/EUR to recover to 1.15 by the end of 2025 as fiscal fears ease before a retreat to 1.1240 at the end of next year as UK yields decline.

Credit Agricole expects a stronger rebound to 1.19 at the end of 2026.

The consensus is that GBP/EUR will be little changed at 1.1360.

Fiscal and monetary policies are both key risk factors for the Pound.

The Pound slumped following reports that Chancellor Reeves had reversed course and would not announce an increase in income tax rates.

There were market concerns that fiscal credibility would be at risk and there was a fresh sell-off in UK bonds.

The Pound managed to stabilise as there was a further iron-clad commitment to the fiscal rules and stated that the OBR forecasts would be more favourable which gave the government slightly more room for manoeuvre.

There is still a higher degree of uncertainty over the policy and market outcome.

UBS expects market fears will subside; “With heightened market attention, the government’s main priority will be to reassure investors of fiscal soundness by adhering to fiscal rules and increasing headroom. We think they will deliver just that, which should translate in the removal of GBP’s risk premium.”

Following the narrow 5-4 vote decision to hold rates at 4.00% at the November meeting and slightly lower than expected inflation data for October, markets are convinced that the BoE will cut in December with further cuts next year.

As far as the Euro-Zone is concerned, there are expectations that fiscal policy will provide a significant boost to the economy.

Danske Bank considers that the fundamentals will hurt the Pound; “We see domestic factors and the relative growth outlook between the UK and the euro area as GBP negatives.”

ING commented; “Our baseline forecast assumes EUR/GBP edges higher through the year. (GBP/EUR losses) The first half should be driven by the BoE easing cycle, but the second half may be more euro-driven. Here, we expect German fiscal stimulus to play an increasingly important role for growth throughout the year as interest rate markets start to consider a 2027 ECB hike.”

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TAGS: Currency Predictions Pound Euro Forecasts