GBP to EUR Forecast: Soft UK GDP Caps Pound Below 1.15

Modified: Friday, 13 February 2026 09:46 BST - Written by Tim Boyer

STORY LINK GBP to EUR Forecast: Soft UK GDP Caps Pound Below 1.15

The Pound to Euro (GBP/EUR) exchange rate was unable to hold above 1.15 on Wednesday and settled around 1.1480 on Thursday.

An under-whelming set of GDP data hampered the Pound, but the currency was protected to some extent by fresh gains in the FTSE 100 index.

GBP/EUR Forecasts: Held Below 1.1500

ING expects the Pound will be undermined by yield trends as the Bank of England (BoE) cuts rates; “Our view remains broadly bullish on EUR/GBP on the back of this and of our call for two BoE cuts by June: 0.88 remains a very realistic short-term target. (1.1360 for GBP/EUR).

UK GDP was reported as growing 0.1% for December, in line with consensus forecasts, while November growth was revised down to 0.2% from the provisional estimate of 0.3%. Industrial and construction output both declined which was offset by a gain in services.

For the fourth quarter of 2025, the economy grew 0.1%, the same rate as in the third quarter and below expectations of 0.2%. There was no growth in services for the quarter with a slide in construction output offset by a rebound in industrial production.

For 2025, GDP growth was estimated at 1.3% from 1.1% the previous year.

ONS director of economic statistics Liz McKeown commented; “The economy continued to grow slowly in the last three months of the year, with the growth rate unchanged from the previous quarter.”

According to Lindsay James, investment strategist at wealth managers Quilter; “A long list of data revisions from the ONS has revealed the UK economy barely kept its head above water in the final quarter of last year, with GDP growth coming in at just 0.1% after downward revisions to the previous two data prints.”

ING expressed some concerns over structural weakness; “What’s particularly eye-catching from the release is just how weak business investment (-2.7%) and construction (-2.1%) came in during the final few months of the year.”

Aberdeen deputy chief economist Luke Bartholomew noted that business surveys have improved, but commented; “it is still hard to see what will drive a sustained increase in the underlying rate of growth this year.”

The BoE policy implications will inevitably be a key element.

Aberdeen’s Bartholomew added; “All of which means that the Bank of England is set to continue to lower interest rates to try to support growth, and we expect the next cut at the March meeting.”

ING will be watching further data releases; “For the Bank, next week's jobs and inflation data will be much more instructive. So long as the recent weakness in hiring, coupled with the sharp slowdown in wage growth, continues, we expect a March cut from the BoE, followed by another move in June.”

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TAGS: Pound Euro Forecasts