The pound to euro exchange rate surged to multi-month highs in July as fading UK political uncertainty boosted Sterling. However, the pound surrendered some of its gains later in the month as investors reassessed the new government’s policy direction and concerns grew over the outlook for UK growth.
Looking ahead to August, the GBP/EUR exchange rate could remain sensitive to UK economic data, Eurozone indicators, interest rate expectations and broader market sentiment. The UK’s latest GDP figures will be closely watched, while German economic sentiment, Eurozone PMI surveys and expectations for a European Central Bank (ECB) rate hike could provide fresh direction for the euro.
Pound to euro forecast for August 2026
The pound to euro exchange rate could firm in August, particularly if UK economic data points to continued resilience and strengthens expectations of an interest rate hike from the Bank of England (BoE).
However, Sterling’s gains may be limited. The pound already retreated from multi-month highs against the euro in July, suggesting it may struggle to break decisively higher from its recent trading range.
Meanwhile, growing expectations for an ECB rate hike in September could support the euro, particularly towards the end of the month. Any hawkish remarks from policymakers could underpin the common currency.
Eurozone economic data and developments in the Middle East could also add another layer of uncertainty.
Overall, the GBP/EUR outlook is cautiously positive, although further Sterling gains are far from guaranteed. Much will depend on whether upcoming data releases meet forecasts and how interest rate expectations develop.
UK GDP could shape the pound to euro forecast
The release of the UK’s second-quarter GDP figures will be one of the key events for Sterling in August.
The data could shape expectations for the Bank of England’s monetary policy outlook, with signs of a resilient economy potentially supporting the pound by boosting expectations that the BoE could hike rates this year.
However, a weaker-than-expected growth reading could fuel concerns over the UK economy and weigh on GBP/EUR.
Impact: GBP positive if UK growth shows resilience
Central bank signals could influence GBP/EUR
Investors will continue monitoring comments from the Bank of England and European Central Bank for clues about the future path of interest rates.
For the euro, expectations of an ECB interest rate hike next month could become increasingly important as August progresses. Any signals from policymakers that reinforce the prospect of tighter monetary policy could support EUR and put pressure on GBP/EUR.
Conversely, dovish comments from the ECB could undermine expectations of a September rate hike, potentially triggering a sharp correction in the euro and providing support to GBP/EUR.
The BoE will also remain in focus, with markets assessing whether resilient UK data and persistent inflation could encourage policymakers to consider higher interest rates later this year.
Impact: GBP/EUR could weaken if ECB hike expectations strengthen
Eurozone economic data in focus
The euro will also be guided by incoming economic data throughout August, including Germany’s ZEW economic sentiment index and the Eurozone’s preliminary PMI surveys.
The ZEW index jumped to 26.3 in July, beating expectations and reaching its highest level since February. However, forecasts point to a deterioration of morale in August, which could limit support for the euro if the data confirms a loss of momentum.
Conversely, another stronger-than-expected reading could reinforce the recent improvement in German economic sentiment and provide support to EUR.
The Eurozone PMI surveys will offer another indication of whether the bloc’s economic recovery is gaining traction.
Impact: EUR negative if Eurozone data disappoints
Middle East tensions remain a market wildcard
The ongoing situation in the Middle East could continue to influence currency markets in August.
Any progress towards a diplomatic resolution could improve investor confidence, potentially supporting more risk-sensitive currencies such as Sterling.
However, a renewed escalation in tensions could trigger demand for safe-haven assets and create volatility across GBP/EUR. Rising energy prices could also weigh on both European currencies, given the region’s reliance on energy imports.
Impact: GBP/EUR volatility likely
GBP/EUR forecast: Key dates to watch in August 2026
The table below shows some of the key data releases that could influence the pound euro exchange rate in August 2026.
Date | Event | Potential GBP/EUR impact |
|---|---|---|
13 August | UK GDP (Q2) | GBP positive if growth is resilient |
18 August | German ZEW Economic Sentiment Index (August) | EUR negative if confidence deteriorates |
19 August | UK Inflation Rate (July) | GBP positive if inflation rises |
21 August | Eurozone PMI Surveys (August) | EUR positive if activity improves |
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.
GBP/EUR outlook for the next few weeks
In the near term, the pound to euro exchange rate is likely to remain particularly sensitive to UK economic data and changing expectations for interest rates.
The UK GDP release on 13 August is likely to be one of the first major tests for Sterling. A resilient reading could reinforce the pound’s recent strength, while evidence of a sharper slowdown could encourage investors to reassess the UK outlook.
Sterling could retain some upside potential if UK economic data reinforces expectations of higher interest rates. However, stronger-than-expected Eurozone data or growing expectations of an ECB rate hike could provide support to the euro and limit GBP/EUR gains.
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 August 2026?
The GBP/EUR outlook for August is mildly positive for Sterling. Resilient UK economic data and persistent inflation could support expectations of higher UK interest rates, potentially strengthening the pound. However, stronger-than-expected Eurozone data and growing expectations of an ECB rate hike next month could support the euro and limit Sterling’s gains.
Will GBP/EUR rise or fall in August?
The pound to euro exchange rate could strengthen in August, although further Sterling gains are not guaranteed. UK GDP and inflation data will be important, while Eurozone economic indicators and expectations for an ECB rate hike could provide support to the euro and 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.
