Banks polled by Exchange Rates UK Research see EUR/GBP rising from 0.8650 toward 0.88–0.90 by 2027, with ING and Goldman Sachs among the most bullish.
Exchange Rates UK Research's April 2026 poll of major investment banks points to a gradual grind higher in EUR/GBP, from the current 0.8650 area toward 0.88 through the rest of this year and potentially 0.90 during 2027. The survey captures a shift in consensus: after a long run of sterling strength that took the pair from above 0.92 in 2023-2024 to the low 0.86s, most desks now expect the pound's edge to dull.
The simple read is that the euro is cheap and due a mean reversion. The better read, and the one that matters for a watchlist decision, is that the transmission mechanism is changing. The rate differential that powered sterling is compressing, UK growth exceptionalism is fading, and the positioning backdrop no longer offers the same tailwind. That does not guarantee a sharp reversal, but it does make the 0.88 magnet a level worth building a framework around.
The poll shows a cluster of forecasts around 0.88 for the coming quarters. Citi, ING, and Goldman Sachs all project moves toward 0.90 during 2027. On the other side, RBC Capital Markets and Westpac remain sterling bulls, targeting 0.86-0.87 over the longer term. The dispersion is tight relative to pairs like EUR/USD or cable, which tells you the market is not pricing a regime change, just a slow rotation.
From a practical standpoint, the 0.88 level is not a random number. It was the ceiling earlier this year before the pair slid to the low 0.86s. A return to that zone would merely undo the most recent leg of pound strength, not break the multi-year range. The survey's median forecast essentially says: the factors that pushed EUR/GBP below 0.87 are losing steam, and the pair will drift back to where it spent most of early 2026.
AlphaScala's proprietary scores add a layer of conviction filtering. ING, which holds the most bullish EUR/GBP call in the survey, carries an Alpha Score of 75 out of 100, labeled Strong. Goldman Sachs, also projecting 0.90, scores a Moderate 56. RBC, the most bearish, sits at a Mixed 46. That does not make the forecast right, but it does flag that the institution with the highest conviction signal is leaning into the euro recovery trade.
Sterling's outperformance through late 2025 and early 2026 was built on a simple rate story. The Bank of England maintained a cautious stance on cuts while the ECB delivered, widening the short-end yield spread in the pound's favor. That spread attracted carry-seeking flow and kept EUR/GBP offered on any bounce.
That mechanism is now compressing. Markets are beginning to price a slower UK growth trajectory, and the energy cost impulse from geopolitical tensions is muddying the inflation outlook in both economies. When energy prices rise, the UK's net importer status means the terms-of-trade channel works against the pound, while the euro area's current account surplus provides a buffer. The survey's upward bias for EUR/GBP implicitly acknowledges that the rate differential alone can no longer sustain sterling at the lows.
At the same time, Eurozone data has stopped deteriorating. Stabilising PMIs and improving investor sentiment toward the euro area have removed the tail risk of a deep recession that would force the ECB into emergency cuts. The pair's downside is now limited not by intervention threats but by a genuine improvement in the growth differential. That is a slower-moving force, which is why the forecast path is a grind, not a spike.
When a currency pair trends for months, positioning becomes the story. The decline from 0.88 to 0.8650 likely built a short-euro, long-sterling consensus. The survey's forecast of a return to 0.88 implies that consensus is now vulnerable to a squeeze.
If UK data softens further, the unwind of those positions could accelerate the move. The 0.88 level is where the pair sat before the last leg of pound strength, so it represents a natural profit-taking zone for sterling longs and a re-entry point for euro buyers. The fact that multiple banks cluster their forecasts there suggests it is also a technical and psychological magnet.
For a trader, the practical question is whether to fade the move toward 0.88 or join it. The survey's tight range argues against a breakout trade. Instead, the setup looks like a range-trading opportunity with a slight upward drift. Buying dips toward 0.8650 with a target of 0.88 and a stop below the 0.83 cycle lows offers a risk-reward profile that aligns with the consensus view.
The survey's central case is a gradual euro recovery, but the risks are two-sided. A faster-than-expected UK growth slowdown, perhaps triggered by a housing market correction or a fiscal tightening, could push EUR/GBP through 0.90 faster than any bank currently predicts. Conversely, if the Bank of England is forced to hike again due to sticky services inflation, the rate differential could widen anew and drive the pair back toward 0.85.
The energy channel is the wildcard. A sustained oil price spike above $100 would hurt both economies but historically punishes the pound more due to the UK's energy import bill. That would accelerate the euro recovery. A resolution to geopolitical tensions that sends energy prices lower would remove that tailwind and could give sterling a new lease on life.
The next concrete marker will be the upcoming UK GDP release and the ECB's June policy meeting. A downside surprise in UK growth or a hawkish hold from the ECB would validate the survey's upward bias. A strong UK print and a dovish ECB would challenge it. For now, the weight of institutional opinion says the path of least resistance is higher for EUR/GBP, but the pace will be slow enough to test patience.
Drafted by the AlphaScala research model and grounded in primary market data – live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.