British Pound to Euro Forecast: Bailey’s Caution Lifts GBP Above 1.1450

Published: Wednesday, 25 February 2026 09:00 BST - Written by David Woodsmith

STORY LINK British Pound to Euro Forecast: Bailey’s Caution Lifts GBP Above 1.1450

The Pound to Euro exchange rate (GBP/EUR) has edged back above 1.1450 after Bank of England Governor Andrew Bailey stopped short of signalling an imminent March rate cut, offering Sterling modest relief after recent losses.

While markets had leaned toward dovish guidance, Bailey’s refusal to commit has tempered expectations of an automatic policy move, helping GBP/EUR nudge higher despite persistent trade uncertainty and political caution ahead of the Gorton by-election.

GBP/EUR Forecasts: Above 1.1450

The Pound edged higher on Tuesday as Bank of England Governor Bailey declined the opportunity to commit to a March interest rate cut. The Pound had been hampered by speculation that Bailey would back a March cut and his comments triggered limited Sterling gains.

The Pound to Euro (GBP/EUR) exchange rate edged above 1.1450 to near 1.1470. Activity was still curbed by the fresh injection of trade uncertainty while expectations of a Euro-Zone rebound helped underpin the Euro.

Caution ahead of Thursday’s Gorton by-election also dampened potential FX moves.

The next GBP/EUR resistance area is around 1.15.

ING still expects Bailey will pull the trigger in March and backs a GBP/EUR retreat to 1.1360.

In testimony to the Treasury Select Committee, Bailey commented; "Well, we'll see. I think at the moment I would say we're still a little way off (from) the next meeting.”

He added; “It is a genuinely open question at the moment.”

Scotiabank noted that there is still scope for market-moving comments; “BoE risk is somewhat more elevated, with several speeches scheduled throughout the remainder of the week, including one from Chief Economist Pill on Friday.”

Trade uncertainty remains a key short-term factor with a lack of clarity over the positions of both the UK and EU.

President Trump announced a new 15% tariff on all imports into the US after the Supreme Court declared the IEEPA tariffs unconstitutional. Officially, however, the rate has been listed at 10%. There is also a high degree of uncertainty over the future of trade deals already in place with the risk that tariffs on the UK will increase.

British Chamber of Commerce's (BCC) president, Andy Haldane commented that “the UK would sit towards the bottom of the league table of trade partners if Trump's 15% tariff came into effect. The perversity of what happened of the weekend was that those who got good deals, the allies, have been most disadvantaged.”

BCC head of trade policy William Bain added; “It is far from clear what will happen next, and whether a higher tariff rate is still on the way. Despite the immediate reprieve, there is fresh uncertainty for UK firms exporting goods to the US.”

There is also a lack of clarity over theEU position with the EU parliament again postponing a vote on the US-EU trade deal
According to Deutsche Bank; "The EU concern is that a stacking nature of the 15% Section 122 tariffs would bring total tariff rates for some products above the 15% maximum agreed by the EU and the U.S.”

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TAGS: Pound Euro Forecasts