If you’ve been waiting for a better rate to convert pounds to euros, May has delivered. GBP/EUR is trading near 6-week highs around 1.1580 — the strongest level since the 2026 high of 1.1597 hit on 19 March. After a hawkish surprise from the Bank of England last week, the pound has firmed up against the euro and is now well above the 2026 average.
The short answer: the rate is currently favourable, but the outlook is genuinely split between major banks — with year-end forecasts ranging from 1.11 to 1.19. If you have a transfer to make in the coming months, May may be one of the better windows you’ll get to lock in.
Here’s what’s happening, what’s driving the rate, and what your options are.
Where Is GBP/EUR Right Now?
| GBP/EUR Metric | Rate | Context |
| Current Rate (early May 2026) | ~1.1580 | Near 6-week highs after hawkish BoE hold |
| Post-BoE peak (1 May) | Above 1.16 | Briefly touched, then settled at 1.1580 |
| 2026 High | 1.1597 | 19 March, post-unanimous BoE hold |
| 2026 Low | 1.1402 | 1 March (Strait of Hormuz blockade) |
| 2026 Average | 1.1509 | Current rate is ~0.6% above average |
| Year-end forecasts | 1.11–1.19 (wide spread) | Deutsche Bank bearish, Bank of America bullish |
Source: Data compiled from exchangerates.org.uk, ECB reference rates, and Pound Sterling Live. Rates are mid-market and indicative.
At 1.1580, the rate is approximately 0.6% above the 2026 average and only 0.15% below the 2026 high. For context, in March the rate was sitting at 1.1540, and in early April it dropped to 1.1480 before recovering. The hawkish BoE hold on 30 April pushed it back up to current levels.
What’s Changed Since April?
The April edition of this article flagged three key drivers: BoE policy direction, the Middle East conflict, and inflation. All three have evolved — and one in particular has been a game-changer.
The BoE delivered a hawkish surprise
The single biggest development was the Bank of England’s 30 April decision. The MPC voted 8–1 to hold rates at 3.75% — with one member voting to RAISE rates to 4.00%. This is the first time since 2023 that an MPC member has voted for a rate hike.
The market reacted immediately. GBP/EUR briefly touched above 1.16 — the highest level in six weeks — before settling around 1.1580. Markets are now pricing in three rate hikes over the remainder of 2026, a complete reversal from January when two cuts were expected.
For our full breakdown of the decision, see our BoE April rate decision analysis.
ECB hinted at a June hike
The European Central Bank held the deposit rate at 2.00% on 17 April but offered clear hints that rates could rise at the June meeting. This is significant: if both central banks hike, the interest rate gap stays at 1.75 percentage points and the GBP/EUR support holds. If only the ECB hikes, the gap narrows and GBP/EUR could weaken.
Forecasts have polarised
Major bank forecasts for GBP/EUR by year-end 2026 are now wildly divergent:
- Deutsche Bank: 1.11 by year-end — sees Brexit drag, election risk, and eventual BoE cuts pulling the pound lower.
- Bank of America: 1.19 by year-end — sees BoE hawkishness, sustained inflation, and structural USD weakness supporting GBP.
- Danske Bank: “one or two hikes” risk — acknowledges the BoE’s tightening risk but expects rates to stay at 3.75% as the base case.
This kind of divergence — a 7% spread between bullish and bearish forecasts — is unusual. It tells us that the next BoE meeting on 18 June, the May local elections, and the Middle East situation will all play a much larger role in determining the year-end rate than typical economic data.
What Does This Mean for Your Transfer?
At 1.1580, the rate is currently better than at almost any point in 2026 except for a brief window in mid-March. For anyone converting pounds to euros, you’re getting more euros per pound than the year-to-date average.
Here’s what the year-end forecast range means for transfers of different sizes:
| Transfer | At 1.1580 (today) | At 1.19 (BoA bullish) | At 1.11 (DB bearish) | Range on £500k |
| £250,000 | €289,500 | €297,500 | €277,500 | €20,000 spread |
| £500,000 | €579,000 | €595,000 | €555,000 | €40,000 spread |
| £1,000,000 | €1,158,000 | €1,190,000 | €1,110,000 | €80,000 spread |
Note: Rates are illustrative based on the interbank mid-market rate. Actual transfer rates include the provider’s margin.
On a £500,000 transfer, the difference between the bullish and bearish year-end scenarios is €40,000. That’s the range you’re betting on if you wait. The current rate of 1.1580 sits comfortably in the middle — not at the top of the year, but well above the bottom.
Key Dates to Watch in May and June
| Date | Event | Why It Matters for GBP/EUR |
| 7 May 2026 | UK local + Scottish/Welsh assembly elections | Political risk for Labour. Heavy defeats could increase speculation over leadership challenge — a GBP-negative scenario. |
| 21 May 2026 | UK CPI inflation (April figures) | If CPI rises further toward 4% (from 3.3% in March), rate hike expectations intensify. Markets pricing 3 hikes by year-end. |
| 5 June 2026 | ECB interest rate decision | ECB hinted at a June hike. If ECB hikes while BoE holds, the interest rate gap narrows, weakening GBP/EUR. |
| 18 June 2026 | Bank of England rate decision | With one MPC member already voting to hike in April, June is the next pressure point. A second dissenting vote would push GBP higher. |
| Ongoing | Middle East / Strait of Hormuz | De-escalation would crash oil prices, ease UK inflation, and weaken GBP. Continued conflict supports GBP via rate hike expectations. |
The 7 May local elections are the immediate political risk. The next major central bank events are clustered in early-to-mid June, with the ECB on 5 June and the BoE on 18 June. Between now and then, the rate could move significantly in either direction.
The Bottom Line: Is May a Good Time to Transfer?
At 1.1580, the rate is favourable by 2026 standards. The pound has been supported by the BoE’s hawkish hold, the dissenting hike vote, and rising inflation expectations. If you’re converting pounds to euros, you’re currently in one of the better windows the year has offered.
But the outlook is unusually uncertain. The 7% gap between Deutsche Bank’s bearish call (1.11) and Bank of America’s bullish call (1.19) reflects a market with two completely different views on where the pound goes from here. Both can’t be right.
Our view: when major bank forecasts diverge by this much, the case for hedging is strongest. The current rate is good. Locking in at least a portion with a forward contract removes the variable you can’t control — and you’ll know exactly what your transfer costs in pounds, regardless of what June’s political and central bank events deliver.
As Lucid founder Dave Huggett explains in his video on FX risk vs opportunity: when the outlook is uncertain, FX strategy should always start with managing your downside, not chasing the perfect rate.
This is not financial advice. Exchange rates are unpredictable and past performance is not indicative of future results. Always consult a qualified financial adviser for your specific circumstances.
How to Protect Your Transfer — Whatever the Market Does
Lock in with a forward contract
At 1.1580, locking in a forward contract for a transfer in the coming months gives you certainty over a rate that’s already above the 2026 average. Whether the BoE hikes, holds, or surprises with a cut, your rate stays the same. Learn more on our forward contracts page.
Set a market order
If you think GBP could push higher — perhaps if the BoE delivers another hawkish surprise on 18 June, or if more MPC members vote to hike — set a target rate above 1.16 with your dealer. If the market hits it, your transfer executes automatically. No obligation if it doesn’t.
Use a blended approach
For larger transfers, lock in the majority (50–70%) at the current rate for certainty, set a market order for a portion (20–30%) to capture potential upside, and keep a small amount flexible for spot trades when timing aligns. This is the same risk-first approach Dave advocates and that corporate treasury teams use as standard.
Frequently Asked Questions
What is a “good” GBP/EUR rate in May 2026?
The 2026 average is 1.1509, and the high is 1.1597. The current rate of 1.1580 is approximately 0.6% above average and within 0.15% of the year’s high. Over the past five years, GBP/EUR has ranged from roughly 1.10 to 1.20, so the current rate is in the upper third of that range.
Will the pound get stronger against the euro?
It depends on three factors: whether the BoE delivers a hike at the June meeting (or signals one for later in the year), whether the ECB hikes faster than the BoE, and whether the Middle East conflict escalates or de-escalates. Forecasts are unusually divided, with major banks split between 1.11 and 1.19 by year-end. The honest answer is that nobody knows.
Should I wait for the 18 June BoE decision?
Waiting is itself a risk. The rate could improve by June, but it could also weaken — particularly if the 7 May local elections increase political uncertainty, or if Middle East tensions ease. The current rate of 1.1580 is favourable by 2026 standards. A forward contract lets you lock in now while keeping options open for any further upside via market orders.
What does the 1 May post-BoE rate move tell us?
It tells us that markets had been pricing in some risk of dovishness from the BoE — and were caught off guard by the hawkish dissent. The fact that one member voted to hike was a stronger signal than markets expected, and the pound rallied accordingly. Whether this strength persists depends on whether the dissent broadens at future meetings.
How often is this article updated?
Monthly. The June edition will be published after the 18 June BoE meeting with updated rate data, the decision analysis, and a revised outlook. Bookmark this page and check back.
Want to Know Exactly What Rate You’d Get Today?
The rates in this article are mid-market interbank rates. The rate you actually receive depends on your provider. At Lucid Foreign Exchange, we’ll show you the interbank rate, our margin, and exactly how many euros you’d receive — with no hidden costs.
Get a free, no-obligation rate quote. Call us, email us, or book a consultation with our team. We’ll also talk you through forward contracts, market orders, and the best strategy for your specific transfer.
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