Pound-to-Euro Forecast: GBP Rises As UK GDP Confirms Strong Q1 Growth

The Pound to Euro (GBP/EUR) exchange rate edged higher on Tuesday after revised GDP figures confirmed the UK economy gathered momentum during the first quarter of 2026.

At the time of writing, GBP/EUR was trading at €1.1612, up around 0.2% on the day.

DAILY RECAP:

The Pound (GBP) ticked higher against some of its rivals on Tuesday in the wake of the UK’s final GDP figures for the first quarter of 2026.

The data confirmed that the British economy grew 0.6% in the first three months of the year, placing the country at the top of the G7 growth table.

However, Sterling’s success was limited. GDP in the final quarter of 2025 was revised down from 0.2% to 0.1%, while GDP contracted 0.1% in April.

Meanwhile, an upbeat market mood also lent the increasingly risk-sensitive Pound some support against its safer peers.

Meanwhile, the Euro (EUR) softened on Tuesday, despite some positive German data.

Retail sales in the Eurozone’s largest economy jumped 1.1% in May, rather than falling 0.1%. Meanwhile, the number of unemployed people in Germany unexpectedly dropped by 1,000 in June.

Despite these upbeat figures, a risk-on mood dampened demand for the relatively safer Euro.

In addition, EUR investors may have brushed off the data as they waited for Germany’s consumer price index to be published in the afternoon.

Near-Term GBP/EUR Forecast: Central Bank Expectations in Focus

Looking ahead, a speech from Bank of England Governor Andrew Bailey could draw GBP investor attention on Wednesday afternoon.

Should Bailey maintain a wary stance on additional interest rate hikes, the Pound may come under pressure.

Meanwhile, EUR investors will likely focus on the Eurozone’s preliminary consumer price index for June. If inflation eased this month, as forecast, the common currency could weaken.

European Central Bank President Christine Lagarde is also due to speak. If the ECB chief echoes her hawkish remarks from Monday, the Euro could enjoy support.