Viewers will see the storyline develop later this autumn, but the soap's bosses are keeping quiet about the circumstances surrounding the engagement.
Sharon, played by Letitia Dean, returned to the show in August and has since begun seeing Jack Branning. When she and Phil announce their engagement it comes as a shock to the rest of Albert Square, but a show insider suggested that all is not as it seems:
"Phil and Sharon are going to get engaged but it's part of a bigger storyline involving the couple," they explained.
"Sharon is still seeing Jack so the fake engagement to Phil is going to cause them a number of problems. It also brings Phil and Sharon even closer together.
"And with [Phil's] long-term girlfriend Shirley Carter out of the picture, who knows where it might lead?"
Sharon and Phil have a complicated history. In the '90s, Sharon was married to Phil's brother Grant, but the pair embarked on an affair behind his back.
"There's always been something between them and there always will be," the insider continued. "Jack is going to get paranoid about Phil and this is further fuelled by the chemistry they have. Jack isn't blind but he wants to believe all Sharon is doing is helping out an old friend.
"Whether these two will ever be able to be just friends remains to be seen. They have a lot of history and ever since Sharon returned to Albert Square it's been the question on everyone's lips."
Sharon also remains unaware of Phil's involvement in her former husband Dennis Rickman's murder in 2005. Viewers saw Phil set Dennis on to gangster Johnny Allen, which led to him being stabbed by henchman Danny Moon.
"The chemistry is still there between Phil and Sharon," said the source. "It's just whether they do anything about it.
"Sharon has no idea that Phil encouraged Dennis knowing he'd go after Johnny. If she did it really could have quite an impact on their developing relationship."