Exchange Rates UK Research’s latest July 2026 survey of leading investment banks suggests the euro is likely to recover some ground against the pound over the next 18 months.
With EUR/GBP currently trading near 0.8534—its lowest levels in around a year—the majority of institutions expect the pair to climb back into the 0.87-0.89 range through 2027.
Only a handful of banks forecast Pound Sterling maintaining its recent outperformance.
Latest Survey Suggests Pound Strength May Be Peaking
The latest Exchange Rates UK Research poll points to a relatively clear consensus that sterling’s recent gains against the euro will become harder to sustain.
Banks including Danske Bank, Goldman Sachs, ING, MUFG, SEB, Scotiabank, CIBC, JP Morgan and Rabobank all expect EUR/GBP to trade between 0.88 and 0.90 during 2027.
At the other end of the spectrum, Bank of America is the most bullish on sterling, forecasting EUR/GBP around 0.83-0.84, while Credit Agricole and Pantheon Macro also expect the euro to remain relatively weak.
Overall, however, the survey average points towards a modest recovery in EUR/GBP from current exchange rate levels rather than a continuation of Pound Sterling‘s strong rally.
That reflects recent market action.
EUR/GBP has fallen steadily over recent months, dropping from above 0.87 in the spring to around 0.853, its weakest level since mid-2025.
The move has been driven by broad sterling strength, with the pound outperforming most major currencies during June and early July.
ECB and Bank of England Outlooks Remain Central
The differing forecasts largely reflect uncertainty over how monetary policy will evolve on either side of the Channel.
Pound Sterling has been supported by expectations that the Bank of England will keep interest rates relatively restrictive as inflation remains elevated, while political uncertainty has eased following recent developments in UK domestic politics.
Meanwhile, the euro continues to receive support from expectations that the European Central Bank could tighten policy further if energy-driven inflation proves more persistent, although policymakers have stressed that future decisions remain highly data dependent.
The result is that many banks now expect the interest-rate gap between the UK and Eurozone to narrow gradually, limiting sterling’s ability to extend recent gains.
EUR/GBP Outlook: Survey Points to Euro Recovery, Not Reversal
The latest Exchange Rates UK Research survey suggests EUR/GBP is more likely to recover gradually than stage a sharp rebound.
Most institutions continue to expect the exchange rate to remain below the long-term averages seen before the inflation shock of 2022, but equally believe current levels underestimate the euro’s medium-term prospects.
For businesses and travellers, the survey implies that today’s favourable pound-to-euro exchange rate may not be available indefinitely.
If the consensus proves correct, Pound Sterling could surrender part of its recent gains as monetary policy expectations converge and the euro area economy gradually stabilises.
