British Pound to Euro Forecast: GBP Holds 1.15 Despite BoE Doubts

Modified: Thursday, 23 April 2026 08:31 BST - Written by Tim Boyer

STORY LINK British Pound to Euro Forecast: GBP Holds 1.15 Despite BoE Doubts

The Pound to Euro exchange rate (GBP/EUR) has edged back above 1.1500, holding firm despite growing doubts over Bank of England rate hikes and ongoing UK political uncertainty.

March inflation rose to 3.3%, but softer core pressures and lingering economic risks have reinforced expectations that the Bank of England may keep rates on hold, limiting further upside for Sterling.

GBP/EUR Forecasts: Edging Above 1.15

The Pound to Euro (GBP/EUR) exchange rate has continued to edge higher with a move to just above 1.1500.

The Pound remains resilient despite Prime Minister Starmer’s political difficulties and increased doubts whether the Bank of England (BoE) will increase interest rates this year.

ING does not expect a BoE rate hike or further significant GBP/EUR gains while Nomura is still backing a slide towards 1.11 over the next few months.

The headline UK inflation rate increased to 3.3% for March from 3.0% previously and in line with consensus forecasts. The core rate edged lower to 3.1% compared with expectations of no change at 3.2%.

The goods rate increased to 2.1% from 1.6% with the services-sector rate at 4.5% from 4.3%. Fuel prices increased sharply while food-price inflation increased to 3.7% from 3.3%

According to ING; “The latest rise in UK headline CPI tells us virtually nothing about the scale and duration of the inflation wave to come.” At this stage, it expects a peak around 4.0%, although much will depend on gas prices.

Capital Economics forecasts that the Ofgem price cap will increase 15% in July with a further 3% increase in October. It expects inflation will peak around 4.0%.

PwC UK economist Adam Deasy noted; “We are yet to see the knock-on impact of price pressures in downstream or byproducts to oil and gas, such as fertiliser, helium, plastics or metals.”
According to ING; “The Bank of England is still flying blind, with the conflict unresolved. But the limited amount of survey data available so far suggests little cause for alarm on inflation.”

Capital Economics Deputy chief UK economist Ruth Gregory noted pressure on the BoE, but added: “That said, we think second-round effects will be limited and interest rates will remain unchanged at 3.75pc this year.”
According to Danske Bank; “We expect the BoE to keep rates unchanged in 2026 and 2027, while markets are pricing in slightly more than one rate hike over the next year.”

Political developments will also continue to be monitored closely with Starmer still under strong pressure surrounding the Mandelson affair as the clock ticks towards the local elections. ING commented; “While the Mandelson scandal does not look sufficient on its own to topple Prime Minister Starmer, markets will likely reassess the PM’s position following the 7 May local elections, where Labour is expected to perform poorly.”

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts