Pound To Euro Forecast – Is Now The Best Time To Buy Euros From Pounds?

GBPEUR Forecast Highlights

• GBPEUR developing a base formation at 1.140-1.160
• Due to rising inflation, rate hikes are expected in EU/UK later this year
• Watch for a technical break of 1.160 base resistance

How has the Pound performed against the Euro recently?

Sterling-Euro has been locked in a grinding sideways moves for over six months now. But is it developing a base formation?

From its daily chart, the pattern here definitely resembles that of a multi-month base.

Look at the ‘neatness’ of the zigzag pattern since January. Prices dipped down 1.140 before bouncing higher to the technical ceiling at 1.160. It did that a few times. Each reaction low is progressively higher.

Will GBP regain the initiative against the Euro? As long as the rate keeps affirming the pattern of higher lows, chances are high that the resistance will eventually give way.

Perhaps the market is waiting for a financial or economical catalyst to disturb the equilibrium state.

Is it a good time to buy Euros with Pounds?

GBP is gaining strength against the Euro very slowly. Is 1.156 a good rate to buy some Euros? In my opinion, yes.

The rate always backed away from this level, and drop to around 1.150. Therefore, I wouldn’t discount this from happening again.

Of course, you may want to wait for a ‘breakout’ at 1.160 – so you can buy more Euros at 1.17-1.18. But there is the risk that this may not happen at a time when you need the foreign currency.

You can secure these Euros for use in the future with a currency forward.

Will the pound strengthen against the Euro in the second half of 2026?

Plenty of macro projections have turned upside down in the last two months.

The unexpected catalyst, of course, is the Iranian blockage of the Strait of Hormuz. Shipping traffic there has come to a standstill. As the Gulf waterway is a vital artillery of the world energy supply flow, energy prices have almost doubled from the February levels. This is creating significantly upward price pressure on the global economy.

Inflation measures in Europe are being dragged up by elevated fuel prices. The latest Euro area annual inflation for May saw the Energy component top the chart at 10.9% (see below). Energy is the undisputed lifeblood of a modern economy. Higher energy prices increase household, businesses and industrial expenditure considerably.

While some may argue that this oil shock will not be as severe as in 2022, I am not so sure. A sustained 100% increase in oil will raise prices for many countries and soon these price increases will filter through the global product chain. Diesel prices, for example, are spiking.

Source: Eurostat (2 June 2026)

As a result, the European Central Bank (ECB) may be forced to act to curb inflation. This means higher interest rates.

Already, some central banks like Norges Bank have already got on hawkish side. The ECB signalled that it will raise 25bps in the coming monetary meeting and eyeing to hike another 25bps in September.

If you look the policy rates of important economies below you will note two things:

• Rates have largely stopped falling
• Some are inching higher

This indicates that the economies of both UK/EU are at inflection point. We are moving to into an economic phase with higher (and rising) interest rates. This is completely different to 2024/5 where rates dropped consistently.

So will GBP strengthen in the new economic phase? Hard to say, because the UK monetary policy will march at the same direction as ECB, albeit not in the exact step.

Therefore, the market is expecting GBPEUR to stay where it is now, with a modest upward tilt (base formation).

Source: yardeni.com

What is the GBPEUR forecast in weeks, months, years? 

On GBPEUR’s future path, aggregate market predictions are evidently quite flat. The forecast range – 1.18 to the high and 1.11 to the low – remains similar one year ahead (see below).

This tells us that most brokers are unsure of what will happen in the next few quarters and are therefore taking conservative views of the currency.

Accordingly, we should expect no major trend in GBPEUR in the foreseeable future.

Source: Exchangerates.org.uk (Jun 2026)