British Pound to Euro Forecast: GBP/EUR Near 16-Month Best as UK Growth Upgraded

Modified: Wednesday, 14 October 2026 10:16 BST - Written by David Woodsmith

STORY LINK British Pound to Euro Forecast: GBP/EUR Near 16-Month Best as UK Growth Upgraded

The Pound Euro (GBP/EUR) exchange rate fluctuated around its highest levels in 16 months on Tuesday, following an upward revision to the UK’s growth outlook for 2026.

At the time of writing, GBP/EUR was trading at €1.1835, having briefly revisited Monday’s 16-month high of €1.1838.

The Pound (GBP) edged higher against weaker-performing currencies on Tuesday, following an upgrade to the International Monetary Fund’s (IMF) forecast for UK economic growth in 2026.

The IMF now projects the British economy will expand by 1.3% this year.

IMF Economic Counsellor Silvana Tenreyro also praised the UK’s fiscal plans, saying the country ‘stands out’ among G7 economies for having a credible strategy to reduce its budget deficit.

However, the IMF lowered its growth projection for 2027 slightly, from 1.3% to 1.2%.

The institution warned that persistently elevated oil prices and rising interest rates could constrain economic activity, tempering further gains for Sterling.

The Euro (EUR) found some support early in Tuesday’s European session as the US Dollar (USD) weakened.

The two currencies’ negative correlation helped the single currency make modest gains as the ‘Greenback’ pulled back.

Lower French government borrowing costs also lent support to the Euro, with the yield on France’s 10-year bonds falling to its lowest level in a week on Tuesday.

Nevertheless, the single currency remained close to multi-month lows against several major peers.

As France’s parliament debated the government’s budget, concerns about a potential resurgence of the country’s debt crisis continued to cloud the Euro’s outlook.

Near-Term GBP/EUR Forecast: BoE and ECB Presidents in Focus

Looking ahead, Wednesday’s session will feature speeches from Bank of England (BoE) Governor Andrew Bailey and European Central Bank (ECB) President Christine Lagarde.

Should Bailey signal that an interest rate increase next month is warranted, the Pound could gain ground.

Conversely, the Euro may come under pressure if Lagarde strikes a cautious tone on further monetary tightening.

Lagarde’s remarks on France’s debt situation will also be worth watching.

Any expression of concern about the potential fallout for the wider Eurozone could unsettle Euro investors and leave the single currency vulnerable.

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TAGS: Pound Euro Forecasts