Pound to Euro Rises as November BoE Rate Hike Bets Build

Modified: Monday, 28 September 2026 20:01 BST - Written by David Woodsmith

STORY LINK Pound to Euro Rises as November BoE Rate Hike Bets Build

The Pound to Euro (GBP/EUR) exchange rate opened the week on the front foot, with Sterling finding support as expectations for another Bank of England (BoE) interest rate increase continued to build.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1661, representing a gain of roughly 0.3% from Monday’s opening levels.

The Pound (GBP) moved higher against most major currencies on Monday as investors increasingly priced in the prospect of the Bank of England (BoE) resuming its rate-hiking cycle in November.

Expectations for a near-term increase in borrowing costs strengthened following comments from BoE Governor Andrew Bailey late last week.

Speaking at the University of Oxford's Monetary Economics Conference, Bailey warned that persistent inflationary pressures, particularly those stemming from elevated energy costs, could make it increasingly difficult for the central bank to maintain its current policy stance.

The prospect of further monetary tightening was reinforced by another sharp rise in oil prices.

Brent crude climbed almost 4% on Monday, moving above $108 a barrel after US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz.

The Euro (EUR) struggled on Monday as renewed demand for the US Dollar (USD) put pressure on the single currency.

The latest jump in oil prices encouraged investors towards the safe-haven ‘Greenback’, although the move formed part of a broader recovery in USD demand as markets continued to reassess expectations for Federal Reserve policy.

Meanwhile, the Euro faced another headwind from rising European gas prices, with renewed concerns over energy costs adding to pressure on the single currency.

Near-Term GBP/EUR Forecast: Eurozone Sentiment Data in Focus

Looking ahead, the next significant catalyst for the Pound Euro exchange rate will be the release of the Eurozone’s latest economic sentiment index on Tuesday.

September’s survey is expected to show that confidence across the bloc continued to improve, which could provide the Euro with some support if the figures meet or exceed expectations.

For Sterling, however, the lack of any major UK economic releases could leave the Pound largely at the mercy of wider market movements.

A continued increase in BoE rate hike expectations could offer some support, while a more cautious market mood may limit GBP gains.

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