Pound to euro exchange rate outlook: GBP/EUR forecast for October 2026

The pound to euro exchange rate fluctuated through September, with Sterling coming under pressure towards the end of the month as renewed concerns over UK public finances and elevated government borrowing costs weighed on sentiment.

GBP/EUR started September around €1.1661 and fell to €1.1608 on 25 September, its lowest level since 1 July, before quickly rebounding. At the time of writing, the exchange rate was trading around €1.1661.

Looking ahead to October, the GBP/EUR exchange rate could remain highly volatile as markets assess UK inflation, changing expectations for Bank of England (BoE) interest rates and the UK government's Autumn Budget. Meanwhile, Eurozone inflation, European Central Bank (ECB) policy and developments in energy markets could influence demand for the euro.

Pound to euro forecast for October 2026

The pound to euro exchange rate could edge higher in October, with Sterling potentially finding support from expectations that the Bank of England could raise interest rates in November.

However, the outlook remains highly uncertain. The UK government's Autumn Budget on 28 October could trigger significant volatility, particularly given the recent deterioration in the UK's fiscal position and the rise in government borrowing costs.

Meanwhile, the euro could find support if Eurozone inflation remains elevated or expectations for further ECB tightening strengthen. However, the ECB's increasingly data-dependent approach could limit the single currency's upside if policymakers signal that further rate increases are not imminent.

Overall, the GBP/EUR outlook is slightly positive for Sterling, although further gains are far from guaranteed. With several high-impact events scheduled for October, sharp swings in both directions remain possible.

UK inflation could shape the pound to euro forecast

The UK's latest inflation figures will be closely watched in October, with the September CPI release due on 21 October.

UK inflation increased to 3.1% in August, while the Bank of England warned that inflation risks had shifted further to the upside. Three members of the Monetary Policy Committee voted for a 25bps rate increase at September's meeting, while the majority opted to leave Bank Rate unchanged at 3.75%.

Another acceleration in inflation in September could reinforce expectations that the BoE will raise interest rates at its November meeting, potentially providing support to Sterling and pushing GBP/EUR higher.

However, a softer inflation reading could have the opposite effect, reducing expectations for a near-term rate hike and potentially weighing on the pound.

Impact: GBP/EUR could strengthen if UK inflation exceeds expectations

UK Autumn Budget could drive GBP/EUR volatility

The UK government's Autumn Budget on 28 October is likely to be one of the biggest potential sources of volatility for Sterling during the month.

The government's fiscal position has deteriorated in recent months as higher borrowing costs have reduced the amount of fiscal headroom available to the Treasury. This could leave the government facing difficult decisions over taxation, spending and investment.

The uncertainty surrounding the budget could make the pound particularly sensitive to headlines in the weeks leading up to the statement. A package viewed positively by financial markets could support Sterling, while concerns over the government's fiscal plans could put renewed pressure on GBP.

The timing of the budget also means that any significant move in the pound could come late in the month, potentially overshadowing other economic developments.

Impact: GBP/EUR volatility likely

ECB policy could influence the euro

The European Central Bank will deliver its latest interest rate decision on 29 October, with the outlook for monetary policy likely to remain an important driver of the euro.

The ECB raised interest rates in September, but President Christine Lagarde stressed that future decisions would remain data-dependent and that interest rates would not necessarily move in lockstep with energy prices.

This has limited expectations for another immediate rate increase. If incoming economic data points to persistent inflation, however, expectations for further tightening could strengthen and provide support to the euro.

Conversely, signs that inflationary pressures are easing or that economic growth is losing momentum could reinforce expectations that the ECB will pause its tightening cycle, potentially limiting EUR gains against Sterling.

Impact: EUR positive if ECB tightening expectations strengthen

Eurozone inflation in focus

Eurozone inflation data will provide an early test of the ECB's policy outlook in October, with the latest figures due on 2 October.

Persistent inflation could support the euro by reinforcing expectations that the ECB may need to maintain a restrictive monetary policy stance for longer.

However, a weaker-than-expected inflation reading could have the opposite effect, reducing expectations for further interest rate increases and potentially providing support to GBP/EUR.

Impact: EUR positive if Eurozone inflation remains elevated

Energy prices and market uncertainty remain a wildcard

Energy prices are likely to remain an important influence on both the pound and euro in October.

The sharp rise in energy prices has already contributed to higher inflation across major economies, while geopolitical tensions have added to uncertainty in financial markets.

For the euro, higher energy prices could prove particularly challenging if they place additional pressure on European consumers and businesses. At the same time, persistent energy inflation could make it harder for the ECB to leave monetary policy untouched.

Sterling could also be vulnerable to shifts in global risk sentiment, particularly if rising energy prices contribute to renewed volatility in bond markets.

As a result, developments in energy markets could produce sharp moves in GBP/EUR without necessarily changing the longer-term outlook for either currency.

Impact: GBP/EUR volatility likely

GBP/EUR forecast: Key dates to watch in October 2026

The table below shows some of the key data releases that could influence the pound euro exchange rate in October 2026.

Is it a good time to buy euros with pounds?

Whether it’s a good time to exchange pounds for euros will depend on your circumstances, including when you need to make the transfer and how much money you’re sending overseas.

It can help to look at where the GBP/EUR rate has been trading recently when deciding whether the current rate looks attractive. But there’s no guarantee a favourable rate will last. Currency markets can move quickly when new economic data is released, central banks change their outlook or unexpected events hit the headlines. Check live and historical GBP/EUR rates.

If you have a deadline for buying euros, it can be tempting to wait for the perfect rate. But there’s no way to know exactly where the market will move next. Instead, it can help to consider what rate you would be happy with, how much you need to exchange and how a further move in GBP/EUR could affect the amount of euros you receive.

If you’d like some help keeping track of the market, Currencies Direct customers have access to a dedicated account manager who can explain what’s driving GBP/EUR movements and discuss how the market outlook relates to their requirements. Customers can also access live rates, market insights and tools such as rate alerts, market orders and forward contracts, giving you more options when deciding when and how to exchange.

These tools can be particularly useful for larger transfers or when you have a specific deadline, where even a relatively small movement in GBP/EUR can make a meaningful difference to the amount of euros you receive.

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GBP/EUR outlook for the next few weeks

In the near term, the pound to euro exchange rate is likely to remain sensitive to UK inflation, changing interest rate expectations and developments in European monetary policy.

The Eurozone inflation release on 2 October will provide an early indication of how persistent price pressures remain in the bloc. A stronger-than-expected reading could support the euro by reinforcing expectations of further ECB tightening.

UK inflation will become increasingly important as October progresses. A stronger reading could reinforce expectations of a November BoE rate hike and provide support to GBP/EUR, while weaker inflation could undermine those expectations.

Sterling could therefore retain some upside potential over the next few weeks, although the path is unlikely to be straightforward. The balance of risks currently points slightly towards a stronger GBP/EUR exchange rate, while the potential for sharp swings in either direction remains high.

You can keep up to date with the latest GBP/EUR news, including daily updates and weekly forecasts, in our currencies section. Or create a free Currencies Direct account to get insights delivered straight to your inbox.

Longer-term pound to euro forecast

Forecasting exchange rates over longer periods is inherently difficult. The GBP/EUR exchange rate is influenced by a wide range of factors, including economic growth, inflation, interest rates, government policy, geopolitical developments and investor sentiment.

This means that a forecast for the next few weeks can be based on a relatively defined set of upcoming events, whereas longer-term predictions become increasingly uncertain.

For anyone planning a currency transfer several months in advance, monitoring the broader trend in GBP/EUR and the factors driving the market can therefore be more useful than relying on a single predicted exchange rate.

Tools such as rate alerts, market orders and forward contracts can help you navigate longer-term currency volatility.

Pound to euro forecast FAQs

What is the GBP/EUR forecast for October 2026?

The GBP/EUR outlook for October is slightly positive for Sterling, although the exchange rate could remain highly volatile. Expectations for a November Bank of England interest rate hike could support the pound, particularly if UK inflation remains elevated. However, the UK's Autumn Budget, Eurozone inflation and ECB policy could all trigger sharp moves in GBP/EUR.

Will GBP/EUR rise or fall in October?

The pound to euro exchange rate could strengthen in October, although the outlook remains uncertain and further Sterling gains are not guaranteed. UK inflation and expectations for a November BoE rate hike could support GBP, while Eurozone inflation, ECB policy and the UK's Autumn Budget could influence the direction of GBP/EUR.

What affects the pound to euro exchange rate?

GBP/EUR is influenced by factors including economic growth, inflation, interest rates, central bank policy, political developments and broader investor sentiment in the UK and Eurozone.

What is the pound to euro exchange rate?

The GBP/EUR exchange rate shows how many euros can be bought with one pound. For example, a GBP/EUR rate of 1.17 means £1 is worth €1.17 before any fees or exchange-rate margins. You can see today’s pound to euro exchange rate and historical charts on our GBP/EUR rates page.

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