Rate differentials · ECB vs BoE · priced as of 12 November 2026
EUR/GBP interest rate differential: ECB vs BoE
As of 12 November 2026, the EUR/GBP interest rate differential is −150 bp: the ECB's deposit rate at 2.50% against the BoE's Bank Rate at 4.00%, in favour of the pound. Markets price the gap at −159 bp in six months and −160 bp in twelve.
Over the next six months, markets price the gap to move −9 bp over six months, towards the pound. That six-month gap has moved −10 bp in a month.
The rate spread, now and priced ahead
| ECB (EUR) | BoE (GBP) | Gap | |
|---|---|---|---|
| Policy rate now | 2.50% | 4.00% | −150 bp |
| Priced in 6 months | 3.00% | 4.60% | −159 bp |
| Priced in 12 months | 3.17% | 4.77% | −160 bp |
| 6-month gap a month ago | 2.93% | 4.43% | −150 bp |
The gap is EUR minus GBP, in basis points (100 bp is one percentage point). Six and twelve months out is the rate implied after each bank's last meeting on or before that date. Market pricing, not a forecast. Each bank's meeting-by-meeting odds: ECB · BoE.
The carry on EUR/GBP
The pound: the Bank of England pays 4.00% against 2.50%, a gap of +150 bp. Holding the higher-yielding currency against the lower earns roughly that gap a year before costs, which is what the carry trade collects; a move in the exchange rate can outweigh it.
How the gap feeds the exchange rate, and when it does not: rate differentials explained and the carry trade explained.
Questions
What is the EUR/GBP interest rate differential?
As of 12 November 2026, the EUR/GBP interest rate differential is −150 bp: the ECB's deposit rate at 2.50% against the BoE's Bank Rate at 4.00%, in favour of the pound. Markets price the gap at −159 bp in six months and −160 bp in twelve.
Is the ECB–BoE gap priced to widen or narrow?
Markets price the gap to move −9 bp over six months, towards the pound, from −150 bp now to −159 bp. A month ago (13 October) the same six-month gap was priced at −150 bp, so it has moved −10 bp since. That is market pricing, not a forecast.
Which side of EUR/GBP has the carry?
The pound: the Bank of England pays 4.00% against 2.50%, a gap of +150 bp. Holding the higher-yielding currency against the lower earns roughly that gap a year before costs, which is what the carry trade collects; a move in the exchange rate can outweigh it.
Where does this pricing come from?
Each bank's priced path comes from the market instrument behind it: Exchange-traded futures, WatchTower model for ECB, Exchange-traded futures, WatchTower model for BoE. The rate six or twelve months out is the one implied after the last meeting on or before that date. The month-ago figure is from our daily snapshot of the same curves.
More on EUR/GBP: EUR/GBP analysis · EUR/GBP retail sentiment · EUR/GBP seasonality · Euro outlook · Euro COT positioning · ECB rate expectations · Eurozone economic surprises · British Pound outlook · British Pound COT positioning · BoE rate expectations · UK economic surprises
Other rate differentials: EUR/USD −150 bp · GBP/USD 0 bp · EUR/JPY +125 bp · EUR/CHF +250 bp · EUR/AUD −235 bp · EUR/CAD 0 bp · EUR/NZD −25 bp · GBP/JPY +275 bp · GBP/CHF +400 bp · GBP/AUD −85 bp · all 28
In WatchTower Terminal, the Rate spread panel draws the EUR/GBP gap against the price. Nothing here is financial advice.