British Pound to Euro Forecast: GBP Capped as Markets Await BoE Guidance

Modified: Wednesday, 29 April 2026 10:36 BST - Written by David Woodsmith

STORY LINK British Pound to Euro Forecast: GBP Capped as Markets Await BoE Guidance

The Pound to Euro exchange rate (GBP/EUR) is holding just below 1.1550, with gains capped by selling pressure as markets await the Bank of England’s upcoming policy decision.

While expectations of a potentially hawkish BoE tone are offering some support to Sterling, persistent economic risks in both the UK and Eurozone, alongside ongoing energy market uncertainty, are limiting further upside.

GBP/EUR Forecasts: Holds Near 1.1550

The Pound to Euro (GBP/EUR) exchange rate has continued to trade just below 1.1550 with selling interest above this level.

Deutsche Bank is backing a slide to 1.11 by the end of 2026 as the UK economy deteriorates.

One key near-term focus will be on the interest rate decisions with the Bank of England (BoE) decision on Thursday while UK and Euro-Zone economic risks will be vital over the medium term.

The BoE faces increased inflation risks as well as downside growth potential.

According to Goldman Sachs; “While recent data point to significant indirect effects as companies pass through increased fuel costs, we do not think this will dissuade the Committee from a wait and see strategy at this meeting given limited evidence so far of second-round effects via wages.”

The bank does see scope for a 7-2 vote with chief economist Pill and Greene voting for rate hikes.

MUFG also sees the potential for a split vote; “There is a good chance several MPC members including Chief Economist Pill and MPC member Mann will vote for a hike this week.”

MUFG also noted the importance of guidance; “Another hawkish message that keeps alive expectations for at least a couple of BoE rate hikes will continue to support the GBP.”

Markets will also continue to be monitoring data releases closely. According to Bank of America; “The litmus test remains the data, a point which we have been emphasising in recent weeks as FX markets transition to the next chapter which we think will be to focus on data.”

It added; “does the BoE share the view that the UK economy will be one of the hardest hit from this geo-political shock.”

There will also be an important negative impact on the Euro-Zone economy.

MUFG commented; “The longer the Strait of Hormuz remains closed, the more disruptive the energy price shock is likely to be for the euro‑zone economy, reinforcing headwinds for the EUR.”

It added; “The current level of the composite PMI is already signalling that economic growth may stagnate at the start of Q2. Stagflation risks were further underscored by a sharp rise in both the input and output price sub‑components.”

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TAGS: Pound Euro Forecasts