Year-end Pound-Euro forecasts differ at 1.15-1.16, while Crédit Agricole expects Sterling to strengthen towards 1.19 during 2027.
The British Pound to Euro exchange rate (GBP/EUR) faces a year-end retreat towards 1.15 under ING’s forecast, while Crédit Agricole expects Sterling to hold nearer 1.16 before recovering in 2027.
Friday’s close of 1.1662 left the pair virtually unchanged over the week, despite a 0.25% fall on Thursday followed by a 0.20% rebound.
ING’s December 2026 target of 0.87 for EUR/GBP translates to approximately 1.1494 for GBP/EUR.
Crédit Agricole forecasts 0.86 for the same date, equivalent to 1.1628, much closer to Friday’s price.
Its stronger Pound Sterling forecasts develop during 2027:
| Date | Crédit Agricole EUR/GBP forecast | GBP/EUR equivalent |
|---|---|---|
| December 2026 | 0.86 | 1.1628 |
| March 2027 | 0.86 | 1.1628 |
| June 2027 | 0.85 | 1.1765 |
| September 2027 | 0.84 | 1.1905 |
| December 2027 | 0.84 | 1.1905 |
ING’s weaker Pound call faces a more hawkish BoE
Before Thursday’s decision, ING argued that investors were expecting too much UK tightening:
“We expect these dovish risks to feed into a weaker sterling against the dollar and the euro.”
The BoE delivered the expected 6-3 vote to hold rates at 3.75%, but warned that inflation risks had increased since July.
The tougher warning challenged ING’s expectations for communication, yet Sterling fell after the announcement.
ING had flagged 41 basis points of tightening priced by December, so a single quarter-point hike could still disappoint those pre-meeting expectations.
The Eurozone shares Pound Sterling’s energy problem
Crédit Agricole sees limits to Pound Sterling’s vulnerability against a Eurozone facing its own energy shock:
“We also believe that some negatives are already priced into the GBP, especially vs the EUR, however, given that the Eurozone would have to deal with the consequences from the negative energy supply shock in the wake of the Iran war as well.”
Its published Bank Rate forecasts stay at 3.75% through June 2027 before declining to 3.25% by December.
We therefore read its 1.19 call as a recovery in Pound Sterling’s relative appeal that can coexist with eventual UK rate cuts.
Our currency coverage draws on live market data, official economic releases and published bank research.
