Pound sterling hits highest level since Brexit referendum

The pound sterling hit a 10-year high against several currencies including the euro earlier this week, recording the highest level since the 2016 Brexit referendum. 

Data released by the Bank of England on Thursday comparing the pound sterling to a basket of other currencies saw the British currency have its strongest performance since June 23, 2016. 

The UK currency reached 86.5 on a scale (the sterling effective exchange rate index) where 100 represents its global strength in January 2005.

This figure dropped sharply following the 2016 referendum – it sat at 87.4 on June 23, plummeting to 84.4 on June 24 and eventually down to 73.83 later in 2016 – and saw further hits during the Covid-19 pandemic and the 2022 mini-Budget. 

The pound performed particularly well against the US dollar, which has fallen following the US midterms, but also against other currencies including the euro and Japanese yen. 

It is important to note that the Bank of England data measures the pound against a basket of currencies, meaning that the current peak does not represent a record against any single currency, including the euro. 

The pound has occasionally been stronger against the euro since the referendum –  in February 2025 it reached around €1.21 – although it has spent the vast majority of the past decade below €1.20.

Why is pound sterling performing well?

Economists have pointed to a period of political stability in the UK, alongside growth figures that have been above projections in recent reports, and closer ties with the EU boosting business confidence.

“There is a sense that the UK is beginning to be viewed in a more favourable light by international investors, with its reputation for stability starting to regain some lustre,” said chief investment strategist at Wealth Club Susannah Streeter, reported in The Guardian. 

“Political and economic difficulties across the Channel, particularly in France, are also providing a stark contrast.”

“The improving relationship with Europe could offer a further boost to growth further down the line, if it translates into fewer trade frictions and closer economic cooperation.”

A hike to interest rates by the Bank of England, also announced on Thursday, is expected to further boost confidence, with investors seeing larger returns on the sterling they hold. 

There are concerns, however, that high energy costs and an increase to the cost of living is beginning to have an impact on consumer spending, which could slow down growth. 

What does this mean for Britons in France? 

The Bank of England data does not relate to specific currency conversions between the pound sterling and euro.

However, the pound sterling has performed well against the euro in recent months, reaching 17-month highs for conversion. The pound has since performed even better, reaching an 18-month high with a conversion rate of €1.2010 for £1 at the start of November 2026.

A higher conversion rate benefits people converting their pound sterling to euros, as they obtain more of the latter currency for the same amount of the former.

This includes income originating in the UK including pension payments, salaries, rental income, etc. 

On a larger scale, this can benefit people converting large sums of money or purchasing property.