Barclays Pound To Euro Forecast 2026: GBP/EUR To See 1.1630 By Early 2027 - Forex Factory

What the desk is arguing

Barclays anticipates a strengthening of the British pound against the euro, with a target of 1.1630 by early 2027. This forecast is underpinned by expectations of a resilient UK economy and a potential divergence in central bank policies which could favor the pound as the Bank of England may adopt a more hawkish stance compared to the ECB.

The desk implicitly rejects scenarios where continued economic headwinds or geopolitical uncertainties could impede the pound’s recovery. This projection seems cautious in light of ongoing inflationary pressures within both the UK and Eurozone, which could impose risks on the expected appreciation of the GBP against the EUR.

Where it sits in our coverage

Currently, our consensus target for GBP/EUR stands at 1.075, with a firm spread ranging from 1.04 to 1.12. This places Barclays' forecast significantly higher than our internal consensus, suggesting a more optimistic view on the performance of the pound relative to the euro than what is reflected in the market.

Specific firm projections include: - JPMorgan: Target of 1.10 by Mar-26 - BNP Paribas: Target of 1.05 by Mar-26 - Goldman Sachs: Target of 1.08 by Dec-26 This mix shows that while Barclays is optimistic, others are more cautious, indicating a divergence in expectations across firms.

How other firms see it

The outlook for GBP/EUR among firms shows varied sentiment. While JPMorgan and Goldman Sachs express some alignment with an upward trajectory, others like BofA present a contrary view, projecting a lower value for GBP/EUR by early 2026, reflecting concerns about the economic environment.

Firms with contrasting views include: - BofA: Projecting 1.04, emphasizing risks related to UK economic stability. - Deutsche Bank: Stating a target of 1.06, citing similar uncertainties in the Eurozone.