---
title: The Pound Hits Its Strongest Level Since the Brexit Vote as UK Rates Rise to 4%
description: The pound buys just under €1.20 after the Bank of England raised rates to 4%. What a stronger pound means for euro property, travel and investments.
author: Dr Marina Nani (Editor-in-Chief)
date: 2026-11-06T15:00:00.089Z
updated: 2026-11-06T15:00:00.120Z
canonical: https://www.richmanmagazine.com/article/pound-to-euro-sterling-strongest-since-brexit-vote
image: https://cdn.nanimediahouse.com/pexels-1791583.webp
categories: Money, Business
content_type: Analysis
region: United Kingdom
publication: Rich Man Magazine
schema_type: Article
about:
  - type: Organization
    name: Bank of England
    description: The Bank of England is the central bank of the United Kingdom. Its Monetary Policy Committee sets Bank Rate, and it regulates banks and building societies through the Prudential Regulation Authority.
    url: https://www.bankofengland.co.uk
    sameAs:
      - https://en.wikipedia.org/wiki/Bank_of_England
---

The pound ended Thursday 5th November at its strongest level against a basket of currencies since the 2016 Brexit vote, Reuters reported. Its trade-weighted index, which measures sterling against the currencies of Britain's main trading partners, rose to 86.37. It has traded above its June 2016 level since December 2025, although it remains below the level of about 88 it held just before the referendum.

The move came on the day the Bank of England raised Bank Rate from 3.75% to 4%, its first rise since August 2023.

## Pound to Euro Rate After the Rate Rise

Against the euro, the pound stood at 83.48 pence per euro on Thursday, which means £1 buys just under €1.20. Last week sterling reached 83.24 pence, its strongest against the euro since March 2025.

On a large payment, every penny on that rate counts. At 83.48 pence, €100,000 costs you £83,480, and a one-penny move in either direction changes the bill by £1,000.

## Pound to Dollar Rate

Against the dollar the pound traded at $1.3473 on Thursday, after touching $1.35025 on Wednesday, its highest since 15th September and the end of a six-session rally. The dollar slipped to its lowest level in more than a month after the Democrats won the US midterm elections, as oil prices and US Treasury yields fell.

## Interest Rates and the Pound

A currency tends to strengthen when its interest rates rise against those of its neighbours, as investors earn more for holding it. Bank Rate now stands at 4%. The European Central Bank's deposit rate was 2.5% after its rise in September, and most economists in a Reuters poll last month expected another quarter-point rise in December. That gap of about one and a half percentage points works in sterling's favour while it lasts.

Money markets also price about three more quarter-point rises from the Bank of England by the end of 2027, and David Rees, chief economist at Schroders, noted that a cycle of close to one percentage point is already priced in. Our [UK interest rate predictions](https://www.richmanmagazine.com/article/uk-interest-rate-predictions-bank-of-england-december) set out the dates and forecasts.

## Buying Euros for Property, School Fees or Travel

If you have a large euro payment ahead, such as a property purchase in Spain, France or Portugal, school fees in Europe or a winter ski trip, sterling is close to its strongest against the euro since March 2025. Currency brokers and many banks offer forward contracts, which fix an exchange rate today for a payment due months ahead. The trade-off is that you give up any further gain if the pound keeps rising.

## Overseas Investments and a Stronger Pound

The same move works against you if you hold assets priced in other currencies. A global tracker fund is about 72% invested in US companies, so it loses value in pounds when sterling rises against the dollar, even if the shares themselves stay flat. Many FTSE 100 companies earn a large share of their profits abroad, and a stronger pound trims the value of those earnings once they are converted.

For how Thursday's Wall Street sell-off hit British funds, read [our analysis of the rate rise and the tech sell-off](https://www.richmanmagazine.com/article/bank-of-england-rate-rise-nasdaq-correction-isa-pension).

## Bank of England and ECB Decisions in December

The Bank of England's next decision is on Thursday 17th December, and markets put the chance of another rise at about 50%. A December rise from the ECB, if it comes, would narrow the gap between the two banks again.

**At a glance**

- Pound to euro: 83.48 pence per euro, just under €1.20 per pound
- Strongest against the euro since March 2025: 83.24 pence last week
- Pound to dollar: $1.3473, after $1.35025 on Wednesday
- Trade-weighted index: 86.37, the highest since the 2016 Brexit vote
- Bank Rate: 4%
- ECB deposit rate: 2.5%