British Pound-to-Euro Forecast: French Riots Push GBP Above 1.19

Modified: Tuesday, 20 October 2026 16:36 BST - Written by James Fuller

STORY LINK British Pound-to-Euro Forecast: French Riots Push GBP Above 1.19

The Pound to Euro exchange rate (GBP/EUR) surged to fresh 16-month highs above 1.1900 as violent protests across France triggered renewed Euro selling.

Pound Sterling subsequently eased towards 1.1880, but French political and fiscal uncertainty continues to favour the Pound, with investors also preparing for crucial UK inflation data that could determine whether the Bank of England raises rates in November.

GBP/EUR Forecasts: Fresh 16-Month Highs

The Pound to Euro (GBP/EUR) exchange rate spiked to fresh 16-month highs just above 1.19 at the Asian market open on Sunday before settling around 1.1880.

The Euro was hurt by violent French protests over the weekend. Markets were also watching geo-political developments, energy markets and equities very closely amid higher volatility and unease surrounding the AI sector. European equities lost ground on Monday

As far as data is concerned, the latest UK jobs report will be released on Tuesday with the inflation data on Wednesday.

Consensus forecasts are for the headline UK inflation rate to increase to 3.4% from 3.1% with the core rate at 2.8% from 2.6%.

At this stage, there are strong expectations that the Bank of England will increase interest rates to 4.00% at the November policy meeting.

Bank of America UK economist Sonali Punhani commented; "The bigger pickup in inflation is still ahead of us rather than behind us. As a central bank, if you are heading towards inflation close to or above 4%, the risk-reward is probably leaning towards the direction of a hike versus a hold and hoping second-round effects don't come in."

Weaker than expected inflation data would trigger some market doubts whether the BoE will pull the trigger next month while stronger than expected figures would make a rate hike a done deal.

Developments in the Euro-Zone will continue to be watched closely.

Deutsche Bank analyst Jim Reid commented; “France’s political and fiscal problems gained another complication over the weekend as nationwide cost-of-living protests descended into some of the country’s worst unrest in years.”

He added; “This won’t make it easy for the international community to be totally comfortable buying OATs, so the modest recovery in French spreads over the last week or so will be tested today.”

According to ING; “Markets have appeared tentatively more relaxed about the budget situation. Still, continued widespread protests in France over the weekend should weigh on domestic stocks and could spill over into the bond market.”

MUFG noted; “The social unrest will reinforce investor concerns over the outcomes from upcoming elections next year in France and Italy. The probability of RN leader Le Pen becoming president has continued to rise hitting around 48% according to Polymarket, encouraged by further evidence of growing public unease with the current political status quo.”

The bank added; “We expect heightened fiscal and political risks in France to remain a headwind for euro performance heading into next year.”

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TAGS: Pound Euro Forecasts