Author, Andrew Gibson
With New Year trading now in full swing, I take a fresh look at the Pound to Euro forecast for early 2026. Here’s my latest view on where GBP/EUR is headed and the factors now driving the rate.
What‘s happening with the Pound to Euro exchange rate?
The Pound has traded in a tight range against the Euro during the past week.
Sterling threatened to break out of the top of this range on Tuesday.
However, the UK unit was unable to trade through the tried and tested €1.16 level of resistance.
Last Thursday’s UK economic data beat expectations.
GDP growth figures revealed that domestic economic activity grew at more that three times the anticipated level in November.
UK Industrial Production and Manufacturing Production numbers, published at the same time, also beat expectations.
What’s happening in the Eurozone?
There was no tier one data released in Europe last week.
However, the Sentix Investor Confidence survey, out on Monday, pointed to continued caution from European economic participants.
Events in the USA have continued to affect the Euro.
President Trump’s imposition of 10% tariffs on several major European countries in protest at their lack of support for his plan to purchase Greenland held back the Euro.
What Events will affect GBP/EUR in the coming weeks?
January has a packed data schedule for GBP/EUR.
Monday 19th’s Eurozone inflation data has the potential to shift support for the Euro.
Analysts expect a print of 2.3% – unchanged from last month.
Anything above this would help the Euro, sending GBP/EUR lower.
Then brings the release of jobs and inflation data for the UK.
The UK inflation data brings the potential for further market movement.
Economists expect an increase to the annualised pace of UK price rises.
Such an outcome would stoke calls for the Bank of England to keep interest rates at their current level.
This would send Sterling higher.
My forecast for the Pound to Euro exchange rate
I forecast that the Pound to Euro exchange rate will climb towards €1.17 in the near-term.
The pair last traded at this level in the middle part of last year.
Futures markets currently price-in only a 50% chance that the Bank of England will cut its benchmark interest rate at its next policy meeting.
If this week’s UK inflation data show an increase from last month and with UK GDP growth holding up well, these odds may drop.
Such an outcome would see Sterling well supported as we head towards February.
Of course, a lot can and will happen in the next couple of weeks.
On any given day, many news events impact the GBP/EUR exchange rate.
That’s why it changes every 2-3 seconds.
Foreign exchange is a 24-hour market.
News is always breaking somewhere in the world.
But don’t be overwhelmed.
When it comes to exchanging money, it’s more a case of monitoring the trend in exchange rates and taking your opportunities when the rate moves in your favour.
If you would like to discuss the Pound to Euro outlook, market trends or the latest rates, simply request a quote below.
Is it a good time to buy Euros with Pounds?
A good way to view today’s Pound to Euro exchange rate is to compare it to past data. Sometimes you need to stand back a little to gain perspective.
In late December 2025, the Pound to Euro rate is trading just a little below its 5-year average.
This makes it a good (but not great) time to buy Euros with Pounds.
With the exchange rate predicted to worsen over the coming weeks, it might be worth locking in a favourable rate now.
In the last 5 years:
- The Average for the Pound to Euro rate has been €1.1576.
- The High for the Pound to Euro rate was €1.2106 (14 Apr 22).
- The Low for the Pound to Euro rate was €1.0681 (23 Mar 20).
Put simply, the average GBP/EUR rate is sitting just below its €1.15 average in recent years.
You could consider any rate above the average as a good time to buy Euros with your Pounds. When you are a buyer of Euros, the higher the rate, the better.
Bear in mind, exchange rates move every few seconds. So picking a good time to buy will depend on how much time or patience you have.
A lot of our customers have several days or weeks in which they need to exchange their money (not years or decades!).
Whatever your timeframe, it’s always important to keep an eye on the rate and choose a favourable time to exchange your Pounds into Euros.
If you get in touch, we can help you with this.
Pound to Euro Forecast Analysis
All forecasts are someone’s opinion – their prediction of the future.
And there are plenty of opinions out there.
If you are looking for a snapshot of opinions over different time horizons, then you can see the latest EUR/GBP forecasts by analysts and banks collated by FX Street.
It lists the views of 8 different analysts and gives 1 week, 1 month and 1 quarter forecasts.
Annoyingly, it’s presented as Euro to GBP, not GBP to Euro.
So ‘bullish’ would mean good for the Euro, and ‘bearish’ would be good for the Pound.
If you want to flip the forecasts into a Pound to Euro rate, then just do a 1 ÷ forecast. So a 0.85 EUR/GBP forecast becomes 1.18 GBP/EUR.
In general, most analysts stay close to the current exchange rate over short time frames. It means most forecasts are simply extrapolations of the present rather than predictions.
It’s called ‘career risk’ if you dare to be different.
But it still gives you a guide for what the view is in the City across a large cross-section of analysts’ opinions and the overall bullish or bearish sentiment.
Longer-term forecasts of exchange rates are hard to come by.
That’s because exchange rates are affected by so many factors that they are almost impossible to forecast with any precision over longer time frames.
Pound to Euro Forecast Weekly – a common-sense approach
If you are looking for a Pound to Euro forecast over the next week, you can narrow your focus to just a few key things.
Over a short period, there will only be a small number of fundamental factors that will influence the Pound to Euro rate.
To get a quick snapshot of what’s happening over the next week, my advice would be to check out the DailyFX Economic Calendar.
It not only lists this week’s economic news, but it also gives you the market expectation and the relative importance of each number (low, medium, or high).
An economic calendar is a good way of knowing whether anything big or important is due out.
If nothing major is on the horizon, then you can focus on the current trend in the Pound to Euro rate.
Is the Pound in an upward or downward trend or trading in a clear range?
Over a daily or weekly basis, use trendlines as your guide and be ready to take advantage of any favourable moves.
Sometimes spikes and dips in the Pound to Euro rate are purely down to technical reasons – the collective action of traders buying and selling for speculative purposes.
Use near-term trading ranges or trendlines as your guide, and don’t be too greedy (we are all susceptible to that).
How we can help you
If you don’t feel confident doing it alone, you may wish to speak with a money transfer specialist.
Most money transfer companies these days are just online apps.
However, at Key Currency we provide clients with access to a currency broker who can discuss your requirements and help guide you on exchange rate trends.
Part of our service is to monitor currency markets on behalf of our clients.
We can talk about specific levels to aim for or simply pounce on a favourable rate when the situation arises.
It’s a more proactive way of achieving a better Euro rate, rather than having to accept whatever rate is put in front of you by an app on a given day.
Pound to Euro Forecast next 6 months – practical advice
When it comes to exchange rates, time brings more risks and more opportunities.
A 1% swing might be considered a big move in the Pound to Euro rate over a week. However over 6 months; it’s not unusual to see swings of 5% or more.
It’s simply because the longer the period, the greater the likelihood that something significant will happen.
But when should you convert your money if you have no specific time in mind?
There’s always a reason to defer.
We hear this all the time:
- The Pound is getting stronger; I’ll wait for it to go up some more.
- The Pound is getting weaker; I’ll wait for it to recover again.
You can see why there’s never a perfect time!
The hidden cost is that your money is sitting idle and not contributing to your life plans.
I’m not suggesting you just go ahead at any old time.
Timing matters.
My practical advice would be to use historical reference points as a guide to your decision.
Start by looking at a GBP/EUR chart using different timeframes.
- When did the rate last trade at current levels?
- How high or low is the rate compared to the last 5 years?
- How long has the current trend been running?
You don’t have to become a wizard of Wall Street; you just want to take advantage of favourable fluctuations.
It’s a case of trying to achieve the best rate possible and then moving on with your life.
You might find it useful to speak to a professional who is watching rates continuously throughout the day.
It’s something we offer as part of our money transfer service.
We work with all our clients to achieve a better rate and take advantage of favourable moves.
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 have found that many customers would rather speak to someone rather than use an app or online system to transfer their money.
Technology has a role to play in finance, but there is no substitute for service.
At Key Currency, we give you one-to-one assistance and work with you to achieve a better exchange rate.
You can read more about us here.
We don’t want to exchange your money at the wrong time. A bad exchange rate could cost you a lot of extra money.
Instead, we will help exchange your money to your best advantage.
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To compare our rates, or discuss Pound to Euro forecasts and current market trends, just request a free quote.