The analysts said EUR/GBP would rise to 0.88 by year-end and push to 0.90 in 2027, from current levels near 0.85. Sterling has rallied about 2% against the euro over the past month, ING said, but the move does not reflect a classic re-rating of UK assets. The broker noted that a UK risk premium remains embedded in the gilt market but has evaporated in sterling, meaning the two markets are telling different stories about Britain's economic health. On the fiscal side, ING flagged growing spending pressures in defence, health and social care, alongside high and rising debt interest costs. Related articlesIs the pound's rally masking underlying UK economic weakness?