FXStreet reports that economists at Rabobank forecast the EUR/GBP pair at 0.87 by end-2021.

“While the UK’s relatively rapid roll-out of its vaccine programme is allowing optimism for H2 to persist, headlines surrounding the risk of a ‘double-dip’ recession have been appearing in reference to the souring of the outlook for the early months of this year. The market is also pricing in an increased risk of a 10 bp rate cut from the BoE later this year, though we may have to wait for the Bank’s next policy meeting on February 4 for further policy clues.”

“In addition to economic hurdles, politics also has the potential to weigh on the GBP this year. Brexit is unlikely to stray far from the headlines as commentators attempt to evaluate the initial impact on the economy.” 

“Our central view is that the pound can make up some ground vs the EUR in the latter part of the year in line with an expected rebound in UK growth. However, the coming months could still bring plenty of hurdles for the pound. Our end of year forecast is EUR/GBP 0.87.”