GBP forecast: key figures
| Measure | Level | Detail |
|---|---|---|
| GBP/USD | 1.3459 (5 November) | Forecast 1.32–1.37 to end-2026; see the GBP/USD forecast |
| GBP/EUR | 1.1991 (5 November) | Forecast 1.18–1.22 to end-2026; see the pound to euro forecast |
| Bank Rate | 4.00% | Raised 5 November, 8–1; next decision 17 December |
| Fed funds range | 3.75%–4.00% | Held 28 October, 10–2; next decision 9 December |
| ECB deposit rate | 2.50% | Held 29 October; next decision 16–17 December |
| UK CPI inflation | 3.5% | September; Bank expects about 5% by mid-2027 |
Is the pound going up or down in 2026?
Sterling is up against the euro, the Swiss franc, the rupee, the Canadian dollar and the yen this year, flat against the dollar and down against the Australian dollar. On ECB reference rates:
| £1 buys | 2 Jan 2026 | 10 Jul 2026 | 5 Nov 2026 | Pound in 2026 | Pound since July |
|---|---|---|---|---|---|
| US dollar | 1.3443 | 1.3423 | 1.3459 | +0.1% | +0.3% |
| Euro | 1.1469 | 1.1743 | 1.1991 | +4.6% | +2.1% |
| Japanese yen | 210.96 | 217.27 | 213.27 | +1.1% | −1.8% |
| Swiss franc | 1.0662 | 1.0831 | 1.1008 | +3.2% | +1.6% |
| Australian dollar | 2.0080 | 1.9314 | 1.9226 | −4.3% | −0.5% |
| Canadian dollar | 1.8462 | 1.8997 | 1.8797 | +1.8% | −1.1% |
| Indian rupee | 121.25 | 127.96 | 127.16 | +4.9% | −0.6% |
The euro row is the story. In late September, after the Fed and ECB had both raised rates while the Bank of England held, GBP/EUR had slipped to 1.1622. Since then the euro has been weighed down by French fiscal stress and the market moved to price a UK rise, and the pound has climbed 3.2% to sit just below its 30 October fixing of 1.1993, the highest since March 2025. Our September forecast of 1.14–1.18 did not anticipate that; we have raised the range rather than defend it.
What is moving the pound right now?
The Bank of England has raised rates to 4%
The Bank of England raised Bank Rate from 3.75% to 4% on 5 November 2026 in an 8–1 vote; Catherine Mann wanted 4.25%. No member voted to hold. Governor Andrew Bailey said the rise should not be seen as the first in an inevitable long sequence, but that it is unlikely to be the last unless the Middle East conflict is resolved. Our Bank of England rate decision page covers the vote in detail.
UK inflation is heading towards 5%
UK CPI inflation rose to 3.5% in September from 3.1% in August, driven by motor fuels. The Bank’s November projection has inflation at around 4½% in the first quarter of 2027 and around 5% in the second quarter, roughly 1¼ points above its July forecast. High inflation keeps the Bank leaning towards tighter policy, which supports sterling, but it also squeezes real incomes and growth.
The rise was priced, so the path matters more
GBP/USD barely moved on the decision because a quarter-point rise was already priced. From here the pound trades on whether a second rise comes in December or February. Several members signalled a near-term case for more; Alan Taylor called his vote a one-off insurance move. The October CPI release on 18 November is the next test.
UK rates now match the Fed and sit well above the ECB
The Federal Reserve held its range at 3.75%–4.00% on 28 October, with two members voting for a rise; it decides again on 9 December. Bank Rate at 4% now equals the top of that range, closing the gap that had favoured the dollar since September. The ECB held its deposit rate at 2.50% on 29 October, so UK rates are now 1.5 points above euro rates, up from 1.25 points before today. See our Federal Reserve rate decision page for the US side.
What is the pound to dollar forecast for 2026?
GBP/USD is forecast to trade between 1.32 and 1.37 to the end of 2026. It fixed at 1.3459 on 5 November, above its 2026 low of 1.3160 in June and below its January high of 1.3817. With UK and US policy rates now level, the next move depends on which central bank goes again first: a Fed rise on 9 December with the Bank of England holding on 17 December could push the pair towards the bottom of the range; a second UK rise could lift it towards the top. Full detail is in our pound to dollar forecast, and the live rate is on the GBP to USD converter.
What is the pound to euro forecast for 2026?
GBP/EUR is forecast to trade between 1.18 and 1.22 to the end of 2026. It fixed at 1.1991 on 5 November, close to its highest level since March 2025. The 1.5-point rate gap over the ECB supports the pound; the risk to that view is a fall in energy prices that lets the Bank of England stop at 4% while the ECB keeps its options open. Full detail is in our GBP/EUR forecast, and the live rate is on the GBP to EUR converter.
What could push the pound higher or lower?
| Supporting GBP | Pressuring GBP |
|---|---|
| A second Bank of England rise on 17 December or in February | The Bank of England stops at 4% while the Fed raises again on 9 December |
| October CPI (18 November) above the Bank’s path | Inflation near 5% squeezes spending and growth |
| Continued French fiscal stress weighing on the euro | A further energy spike, which hits the UK harder as a net importer |
| UK growth stays resilient | Renewed UK fiscal or gilt-market stress |
These are Cambridge Currencies’ ranges and scenarios as at 5 November 2026. They are not guarantees and rates may move either way. See the currency forecasts hub for the latest view across all pairs.
What is the sterling forecast for 2027?
For 2027 as a whole we expect GBP/USD between 1.28 and 1.40 and GBP/EUR between 1.15 and 1.24. The pound’s case rests on inflation near 5% in mid-2027 keeping Bank Rate at or above 4%. The case against it is a resolution of the Middle East conflict that brings energy prices down and lets the Bank reverse course faster than the Fed. Our US dollar forecast for 2027 covers the dollar side.
What does the GBP forecast mean for your currency transfer?
Buying property abroad
A completion date in December sits across the Fed on 9 December, the Bank of England on 17 December and the ECB on 16–17 December. On a £400,000 purchase, a 2% move is £8,000 of purchasing power. A forward contract fixes the rate for up to 12 months and removes that event risk from your budget. See our guides to buying property in Spain and transferring large amounts internationally.
Business payments
Businesses paying euro suppliers are buying at sterling’s strongest level in more than eighteen months, while dollar payers face a pair with no rate advantage either way. Fixing a share of forecast payments limits the damage from a move against you. See our guide to how exchange rates affect UK business.
Transfer options
Forward contract: fix a rate now for a payment due later. Limit order: target a better rate that executes automatically if reached. Split your transfer: convert in stages either side of the December decisions to average your rate. Each has trade-offs, and which suits you depends on your deadline and how much certainty you need.
Pound forecast FAQs
Will the pound go up in 2026?
The pound is already up 4.6% against the euro this year and flat against the dollar. The forecast to year-end is 1.32–1.37 against the dollar and 1.18–1.22 against the euro. A second Bank of England rise would support it; a Fed rise on 9 December without a matching UK move would weigh on it against the dollar.
Why didn’t the pound rise when the Bank of England raised rates?
The rise to 4% was widely expected and already priced, so it told markets little new. GBP/USD was virtually unchanged on the day. The pound now trades on whether further rises follow.
What is the pound to dollar forecast for 2026?
GBP/USD is forecast at 1.32–1.37 to the end of 2026, from 1.3459 on 5 November. The Fed on 9 December and the Bank of England on 17 December are the key drivers.
What is the pound to euro forecast for 2026?
GBP/EUR is forecast at 1.18–1.22 to the end of 2026, from 1.1991 on 5 November. UK rates are now 1.5 points above the ECB’s deposit rate.
Will the Bank of England raise interest rates again?
Possibly. Bank Rate went to 4% on 5 November, and several members see a near-term case for more. The Governor tied further rises to energy prices and the Middle East conflict. The next decision is 17 December, then 4 February 2027.
Is now a good time to transfer money abroad?
The pound is near an eighteen-month high against the euro and mid-range against the dollar. Three central bank decisions fall between 9 and 17 December. A forward contract fixes your rate and removes that timing risk. See our guide on whether now is a good time to exchange money.
Converting sterling before the December decisions? Speak to a Cambridge Currencies specialist about timing your transfer around the Fed and the Bank of England. All transfers are completed by phone with a dedicated specialist. We work with FCA-authorised payment partners, Currencycloud (FRN 900199) and ScioPay (FRN 927951), with client funds safeguarded at a credit institution in line with UK safeguarding rules. This article is general guidance to help you make your own informed decision, not a personal recommendation.
