British Pound to Euro Forecast: 1-Week Best as Oil Prices Crash

Modified: Thursday, 9 April 2026 09:11 BST - Written by David Woodsmith

STORY LINK British Pound to Euro Forecast: 1-Week Best as Oil Prices Crash

The Pound to Euro exchange rate (GBP/EUR) climbed above 1.1500 to one-week highs, supported by improved risk appetite following a ceasefire in the Middle East and a sharp drop in energy prices.

While falling oil prices and stronger equities have lifted Sterling, analysts warn that resistance around 1.15–1.16 could cap further gains amid lingering UK economic concerns.

GBP/EUR Forecasts: 1-Week High

The Pound to Euro (GBP/EUR) exchange rate found support above 1.1450 in Asian trading on Wednesday and posted a strong gain to test 1-week highs above 1.1500 during the European session.

ING still expects that there will be tough GBP/EUR resistance above the 1.1500 level.

CIBC has an end-year GBP/EUR forecast of 1.1360 amid UK economic risks.

There was a big boost to risk appetite following the announcement of a cease-fire between the US and Iran. Stronger risk conditions helped underpin the Pound with the FTSE 100 index securing a sharp gain of over 3% to a 5-week high.

The Pound was also resilient despite a sharp decline in yields. There were strong gains for UK bonds with the 10-year yield declining sharply to around 4.62% from levels above 4.80% the previous day.

Oil prices declined sharply with Brent trading around 15% lower around $90 p/b.

MUFG noted; “The UK has become increasingly dependent on imported fuels and hence is much more exposed than in the past to the energy price surge.”

There will, therefore, be relief that oil prices have declined sharply, although prices are still higher than before the Iran war and there will still be a hit to the economy.

Markets are now fully pricing in one rate hike for this year compared with three hikes in late March.

ING commented; “one might have thought EUR/GBP could be trading a little higher were Bank of England policy tightening to be priced out more quickly than that of the ECB.”

MUFG commented on the mixed outlook; “The performance of the pound has held up better than expected in part on the back of the surge in short-term yields. Yields will certainly fall sharply in response to this deal but a hit to growth (albeit less than it could have been) is still likely and if crude oil prices and refined fuel prices remain higher than before (likely) there will be a hit to growth and yields will remain higher than before.”

It added; “Some reversal of the pound’s solid performance is still feasible over the coming weeks.”

Halifax reported that UK house prices declined 0.5% for March after a 0.3% increase the previous month with the annual increase slowing to 0.8% from 1.2% previously.

Halifax Head of Mortgages Amanda Bryden commented; “The recent slowdown in the housing market reflects the wide uncertainty regarding the conflict in the Middle East.

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TAGS: Pound Euro Forecasts