British Pound to Euro Forecast: GBP Stalls at 1.20 as Oil Prices Fall

Modified: Wednesday, 11 November 2026 13:51 BST - Written by David Woodsmith

STORY LINK British Pound to Euro Forecast: GBP Stalls at 1.20 as Oil Prices Fall

The Pound to Euro exchange rate (GBP/EUR) retreated towards 1.1960 as Brent crude fell to 10-week lows, easing pressure on the Euro and raising the prospect of a correction in stretched currency positions.

MUFG warns that substantial speculative bets against the Euro leave it vulnerable to a rebound, while Sterling faces a fresh test from Thursday's UK GDP figures.

GBP/EUR Forecasts: Stall Near 1.20

The Pound to Euro (GBP/EUR) exchange rate has been unable to mount a fresh challenge on the 1.20 level, retreating to near 1.1960 in European trading on Tuesday amid concerns that the Pound is overbought.

MUFG commented; “Short euro positions have increased sharply since mid-September and have hit their highest level since the start of the COVID shock in early 2020. It leaves the euro vulnerable to a short squeeze in the near-term if the investor concerns over the scale of the energy shock continue to fade.

ING continues to expect strong GBP/EUR resistance close to 1.20.

Oil prices have declined further with Brent trading at 10-week lows. Rabobank noted; “Brent crude sank $4.60 to its lowest price since September, at $93.70/bbl on renewed hopes of world peace, as Trump announced over the weekend that it’s “highly unlikely” that we will order extensive strikes on Iran, assuming Iran signs a “very strong agreement.”

Gas prices have rebounded to some extent, but are trading near 1-month lows. Lower energy prices will offer some net support to the Pound and especially the Pound in global markets, especially if there is some easing of pressure on bond markets.

A sustained retreat in energy prices would also lessen pressure on the Bank of England to sanction a further increase in interest rates in December.

UK economic developments will continue to be monitored closely, especially as there will still be a sharp increase in retail energy prices in January.

The British Retail Consortium (BRC) reported that like-for-like retail sales increased 1.1% in the year to October from 1.0% previously, but marginally below consensus forecasts.

BRC Chief Executive Helen Dickinson commented; “October was subdued for retailers, as shoppers delayed spending ahead of Black Friday and Christmas.”

Deutsche Bank is still broadly optimistic over the outlook; "The UK GDP story has been one of more than just resilience in 2026. Early signs of stronger productivity growth have pushed activity higher. Capex growth has also lifted output, with AI spending, defence spending, and industrial policy all boosting GDP."

It added; "Consumers have also been out in force — despite the energy shock. And businesses have remained fairly confident regardless of still-elevated geopolitical uncertainty."

The latest GDP data will be released on Thursday. Consensus forecasts are for no change in GDP for September after 0.1% growth the previous month with third-quarter GDP growth of 0.7% for the third quarter after 0.5% growth for the second quarter.

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TAGS: Pound Euro Forecasts