Exchange Rates UK Research’s latest April 2026 survey of major investment banks shows the EUR/GBP exchange rate is expected to move gradually higher from current levels near 0.8650 towards the 0.88–0.90 region through 2026 and 2027.
The findings suggest most banks expect the euro to recover modestly against the pound over time, although the overall forecast range remains relatively tight compared with other major currency pairs.
Latest Survey Signals Gradual EUR/GBP Recovery
The majority of banks in the latest Exchange Rates UK Research poll expect EUR/GBP to trade closer to 0.88 over the coming quarters, with several institutions, including Citi, ING and Goldman Sachs, projecting moves towards 0.90 during 2027.
By contrast, RBC Capital Markets and Westpac remain more constructive on the pound, forecasting EUR/GBP closer to 0.86–0.87 over the longer term.
Overall, however, the survey points to a modest upward bias for EUR/GBP from current levels.
That outlook follows a period of sustained pound strength.
EUR/GBP has fallen steadily from highs near 0.88 earlier this year towards the low-0.86s, with sterling benefiting from relatively firm UK interest rate expectations and stronger investor sentiment towards UK assets.
The move has also extended a broader decline from the 2023–2024 highs above 0.92, although EUR/GBP remains well above the lows below 0.83 seen before the post-pandemic inflation cycle.
Pound Strength Faces Increasing Headwinds
The latest survey suggests banks increasingly believe sterling’s outperformance may begin to moderate.
Recent market moves have been heavily influenced by diverging expectations around the Bank of England and European Central Bank.
The Bank of England has maintained a relatively cautious stance on rate cuts amid persistent UK inflation pressures, helping support the pound through much of the past year.
However, markets are now starting to price a slower UK growth outlook, while rising energy costs linked to geopolitical tensions have added fresh uncertainty to the inflation picture.
At the same time, improving Eurozone economic data and stabilising investor sentiment towards the euro area have helped limit EUR/GBP downside.
This combination helps explain why many banks now expect EUR/GBP to stabilise and gradually recover after sterling’s strong run lower.
EUR/GBP Outlook: Stable Range Expected, But Bias Turns Slightly Higher
The latest Exchange Rates UK Research survey suggests EUR/GBP is likely to remain relatively stable near current levels in the near term before gradually drifting back towards 0.88 and potentially 0.90 during 2027.
Importantly, the overall forecast range remains relatively narrow compared with more volatile currency pairs, reinforcing the view that banks expect a broadly controlled trading environment rather than a major breakout.
Still, the balance of risks appears to be shifting slightly away from sterling after an extended period of pound strength.
For now, the survey points to gradual euro recovery rather than a sharp reversal.
But with UK growth expectations softening and central bank policy expectations evolving, the pound’s recent outperformance may become increasingly difficult to sustain.
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