Author, Mike Smith
After the new UK Budget, I’m revisiting the Euro-to-Pound outlook for the remainder of 2025 and the start of 2026. Here’s my updated take on where EUR/GBP could be heading and what’s steering the rate now.
What has been happening with the Euro to Pound exchange rate?
Investors abandoned the Pound in early November as fears grew around Chancellor Rachel Reeves’ upcoming Budget, due later in the month.
Reeves suggested in an early-month press conference that she may announce an increase to basic tax rates, causing Sterling to weaken.
However, the Euro’s strong performance from recent months began to lose momentum by mid-November.
The Euro to Pound exchange rate peaked at £0.8866 on 14th November.
Since then, the Pound has made a steady recovery.
How did the Budget affect the Pound?
UK Chancellor Rachel Reeves delivered her Autumn Budget Statement at lunchtime on 26th November.
Initially, Sterling lost ground against the Euro as investors reacted to concerns over higher overall taxation levels.
However, the Pound regained momentum before the close of London trading, with EUR/GBP ending the day at £0.8758.
Earlier that day, updated GDP growth forecasts from the Office for Budget Responsibility (published accidentally ahead of the Budget) also influenced Sterling.
The projections showed UK growth increasing from 1.0% to 1.5% for 2025.
This positive impact on the Pound was partly offset by downgraded growth expectations for 2026, 2027, 2028, and 2029.
What’s the outlook for the Euro?
The possibility of peace talks between Russia and Ukraine has recently offered some support to the Euro.
A lasting resolution on the eastern edge of the Eurozone would be fundamentally positive for the single currency.
However, comments from EU officials suggesting that Moscow is showing little genuine intent to engage in talks could undermine this support.
Near-Term EUR/GBP Exchange Rate Forecast
We forecast that the Euro to Pound exchange rate will continue to fall, potentially reaching £0.8680 within the next fortnight.
Rachel Reeves’ avoidance of any major missteps in her Budget speech has resulted in a short-term relief rally for Sterling.
However, any positive developments regarding Ukraine peace negotiations could help support the Euro and slow the Pound’s advance.
Currency markets are highly reactive, with EUR/GBP changing second-by-second throughout the trading day.
As a result, exchange rate forecasts can shift quickly.
It helps to have a currency expert monitoring the markets on your behalf.
If you would like our latest EUR/GBP rates or updates on key market developments, request a quote below.
EUR to GBP forecast poll (1 week, 1 month, 1 quarter)
Some of the leading FX websites regularly carry out polls of exchange rate forecasts among various experts and analysts.
This is a good way to get an overview of the consensus view over different intervals.
One of the better forecast polls is produced by FX Street.
You can view their latest EUR to GBP poll here.
To be clear, I have no affiliation with them.
I just like the straightforward presentation of information, and you get to see the views of around 15 analysts in 1 week, 1 month and 1 quarter frame.
You don’t have to go through every view (how boring).
At the top of the page is a nice little summary of the overall sentiment showing the percentage with a bullish, bearish or sideways bias.
In the case of EUR/GBP, bullish would indicate the Euro is expected to rise; bearish would indicate an expected fall and sideways would indicate those sitting firmly on the fence.
The point of all this is not to reach a place of certainty. You will only ever have certainty in hindsight (we’re all guilty of that sometimes).
However, a poll can be a good way of capturing forward-looking data and giving you a feel for the strength of conviction among analysts.
EUR to GBP forecast weekly – my approach
There’s only a small number of things that can affect a weekly EUR-to-GBP forecast.
A weekly timeframe is so small that you can narrow down your focus.
I do some simple checks using both fundamental and technical analysis.
Fundamental analysis involves evaluating news, events and economic data that influence currency markets.
To get a quick snapshot of what is scheduled for release in the coming week, I suggest you look at the DailyFX economic calendar.
There are plenty of free economic calendars online. Still, I like this one because the layout is easy to understand, and it assigns each piece of economic data with a low, medium, or high level of importance.
I concentrate on high-impact events as they have historically proven to cause far greater market volatility.
A calendar is a helpful way of managing risk.
If you are cautious by nature and you can’t afford for the rate to move against you, then it makes sense to convert your Euro to Sterling before the release of a high-importance event.
If you are more comfortable taking on the risk, you may prefer to rely on technical analysis.
Technical analysis involves the use of market data and historical charts to identify trends and predict price movements.
There are so many websites that offer free EUR/GBP charts, but a lot don’t add any technical analysis.
Investing.com is a good free source of technical analysis of the Euro to Pound rate.
Just select the timeframe you want (in orange), and it will give you a summary of whether it’s a Buy (Euro to strengthen) or a Sell (Euro to weaken) based on market momentum and technical indicators.
I appreciate doing this kind of analysis won’t be everyone’s cup of tea.
If you would rather speak to someone more familiar with foreign exchange markets, it can be beneficial to get in touch with a money transfer specialist.
While most money transfer companies these days are online apps, others, such as ourselves, are happy to discuss and understand your requirements and help guide you on exchange rate trends, forecasts and market news.
EUR/GBP forecast long-term – some practical advice
Longer periods call for a different approach.
Time brings the opportunity for larger moves – good or bad.
While a 1% swing would be considered a big move in the EUR/GBP rate in a week, over 6 months, it’s not unusual to see swings of 5% or more.
It’s because broader macroeconomic themes have time to play out over longer periods. There is also a greater likelihood that an unexpected, significant event could unfold.
While time gives you flexibility, it can also lead to procrastination.
This is a common thing I hear:
- It’s not the right time. The Euro is going up; I’m going to wait for it to go up some more.
- It’s not the right time. The Euro is going down; I’m going to wait for it to come back up.
Because the Euro is always going either up or down, you may fall into the trap of thinking it is never the perfect time to exchange your money.
It is human nature to always want a better rate, no matter what the actual rate is.
I’m not suggesting you accept whatever rate is put in front of you.
But I am suggesting you think through what rate you would be satisfied with or would allow you to fulfil your life plans (which is the real objective here).
As a former stockbroker, I am reminded of what my old boss used to love to say. It’s a quote from a comic strip character, Pogo “We have met the enemy, and he is us.”
Human emotions can easily get in the way of logic, particularly when it comes to financial decisions.
My practical advice for longer-term EUR/GBP forecasting is simply to use historical reference points as a guide to your decision.
Start by looking at the EUR/GBP chart using different timeframes. I tend to look at 1 month, 6 months, 1 year, and 5 years.
I’m seeking to identify areas of support (troughs) and resistance (peaks).
As a Euro seller, you want to sell near a peak to maximise your position. It’s often a case of being vigilant and not too greedy.
You might find it useful to speak to a professional who is watching rates continuously throughout the day.
You may have neither the time nor the inclination to watch the exchange rates all day yourself and so may miss the best opportunities.
It’s something we offer are part of our money transfer service.
Need guidance on exchange rates?
These days most money transfer companies just give you access to a platform or app and leave you to do everything yourself.
The way we operate is fundamentally different.
We work with our clients to achieve a better rate and take advantage of favourable moves.
At Key Currency, we give you a one-to-one service. We will understand the amount of money you wish to exchange and the timescale you have.
We can then discuss and monitor the rate for you, keeping you up-to-date and letting you know if the exchange rate moves in your favour.
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