British Pound to Euro Forecast Alert: GBP Steady Ahead of Bank of England

Modified: Thursday, 30 April 2026 10:01 BST - Written by Frank Davies

STORY LINK British Pound to Euro Forecast Alert: GBP Steady Ahead of Bank of England

The Pound to Euro (GBP/EUR) exchange rate is holding close to 1.1550, with Sterling struggling for direction as markets brace for crucial policy decisions from the Bank of England and European Central Bank.

With interest rates expected to be held steady, attention is firmly on forward guidance and voting splits, as investors assess whether central banks will lean hawkish in response to persistent inflation risks or prioritise slowing growth.

GBP/EUR Forecasts: Holds Near 1.1550

The Pound to Euro (GBP/EUR) exchange rate has posted marginal losses, but remains close to 1.1550.

The clash between market expectations and huge central bank interest rate decisions on Thursday will be key short-term elements for the Pound.

Given underlying UK fundamentals, Danske Bank is still forecasting a GBP/EUR retreat to 1.1240 on a 6-month view.

Prime Minister Starmer survived a parliamentary vote on whether he should be investigated by the privileges committee, but there is still a high degree of uncertainty, especially with local elections next week.

Scotiabank noted on-going concerns; “Domestically, market participants are assessing the ongoing political uncertainty surrounding PM Starmer’s leadership and the implications for fiscal policy, given that much of the recent rebuilding of confidence has been linked to Chancellor Reeves and her adherence to self-imposed fiscal rules.”

The Bank of England will announce its latest policy decision on Thursday. Consensus forecasts are for rates to be held at 3.75% with the potential for a couple of committee members to vote for rate hikes. Markets are pricing in two rate hikes this year.

Danske Bank is not convinced that rates will be increased; “Hiking rates will have to be weighed against a considerable risk of exacerbating a looming economic contraction. We think it is most likely the BoE will remain sidelined for the foreseeable future.”

The ECB will also announce its latest policy decision on Thursday with no change in rates expected at this stage. Markets are, however, pricing in three ECB rate hikes this year. There will be pressure on the bank to raise interest rates to combat inflation, but there will also be an impact on the economy.

According to ING; “Growing signs of adverse growth effects will make aggressive rate hikes less straightforward. Even though the ECB’s primary policy goal is price stability, it’s hard to see that it would really want to fight an exogenous supply shock at the cost of worsening an economic downturn.”

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TAGS: Pound Euro Forecasts