ING’s tactical range limits GBP/EUR near 1.166, but UBS expects Sterling to reach 1.19 by December before settling near 1.18 in 2027.
The British Pound to Euro (GBP/EUR) exchange rate held near 1.1650 on Tuesday after Chancellor John Healey’s first major economic speech produced only a restrained Sterling response.
Foreign exchange analysts at ING expect GBP/EUR to stay close to current levels in the near term, while UBS forecasts a 2.1% rise to 1.19 by the end of 2026.
The two calls point to limited immediate momentum followed by a stronger Pound move before December.
ING expressed its forecast in EUR/GBP terms, expecting 0.8580-0.8610 to contain the pair for now.
Inverting that range gives an equivalent GBP/EUR band of approximately 1.1614-1.1655, placing the latest rate close to its upper boundary.
Ahead of Healey’s address, ING said:
“Expect him to emphasise fiscal sustainability today, but it will be hard for him to conjure up many meaningful pro-growth measures. 0.8580-0.8610 should contain EUR/GBP for the time being.”
Healey subsequently focused on growth, regional investment and reducing the cost of regulation, but left tax and spending details for the October 28 Budget.
“The Prime Minister and I are in lockstep in our commitment to meeting the fiscal rules at the upcoming Budget,” the Chancellor said in his economic speech.
Pound Sterling edged higher initially, but the lack of policy detail prevented the GBP/EUR exchange rate from making a decisive break above 1.1660.
Our latest Pound-to-Euro market report also found that the Chancellor’s growth message provided only modest support.
UBS Expects Most of the Sterling Rise This Year
UBS takes a more constructive medium-term view, forecasting GBP/EUR at 1.19 in December 2026.
The bank then expects the pair to ease to 1.18 in March 2027 and remain at that level through June and September.
Expressed in the opposite direction, UBS forecasts EUR/GBP falling from around 0.86 to 0.84 by December before returning to 0.85 during 2027.
Most of the expected Sterling appreciation is therefore concentrated in the closing months of 2026 rather than spread across next year.
UBS’s outlook also contrasts with Rabobank’s forecast for EUR/GBP to rise towards 0.87, equivalent to GBP/EUR falling towards 1.1495.
The European Central Bank’s decision this week provides the next immediate test, while the October Budget will determine whether the British Pound can move from ING’s narrow tactical range towards UBS’s 1.19 forecast.
Our currency coverage draws on live market data, official economic releases and published bank research.
