Pound to Euro Forecast: GBP Drops vs EUR to One Month UK Jobs Low

June 10, 2025 - Written by Ben Hughes

STORY LINK Pound to Euro Forecast: GBP Drops vs EUR to One Month UK Jobs Low

The Pound-to-Euro exchange rate (GBP/EUR) fell to a one-month low on Tuesday as markets responded to some lacklustre UK jobs data.

At the time of writing, GBP to EUR rate was trading at €1.1818, down more than 0.3% on the day.

The Pound (GBP) came under early pressure on Tuesday after the UK’s latest labour market figures strengthened the case for interest rate cuts from the Bank of England (BoE).

The British unemployment rate ticked higher in April, rising to 4.6% from 4.5% – its highest level since August 2021. The uptick in joblessness raised fresh questions over the resilience of the UK economy.

Meanwhile, wage growth undershot expectations. Regular pay (excluding bonuses) increased by 5.2% year on year in the three months to April, slowing from a downwardly revised 5.5% and missing the forecast of 5.4%.

The combination of weakening wage momentum and rising unemployment prompted markets to ramp up bets on monetary easing from the BoE, dragging the Pound lower in response.

While the Euro (EUR) was able to climb to a one-month high against the weakening Pound on Tuesday, the common currency faced headwinds elsewhere.


A key factor in EUR’s underperformance was the currency’s strong inverse trading relationship with the US Dollar (USD). As the Dollar rose on hopes that US-China trade talks would ease tensions between Washington and Beijing, the Euro weakened.

Furthermore, an upbeat market mood dampened the safe-haven Euro’s appeal, with investors opting for riskier assets. This particularly limited the single currency’s gains against the increasingly risk-sensitive Pound.

Looking ahead, UK government spending plans are likely to set the tone for the Pound. The upcoming spending review is expected to unveil increased capital investment, supported by recently relaxed fiscal rules.

However, anticipated cuts to departmental budgets and lingering concerns about potential tax hikes in the autumn could temper any market optimism.

If investors view the plans as economically stimulative, Sterling could find some support. On the other hand, fears over fiscal tightening or political backlash may limit any upside.

With no major Eurozone data on the immediate horizon, attention will turn to commentary from European Central Bank (ECB) officials. Remarks from three policymakers are scheduled, and any signals pointing to a sustained path of rate cuts could apply renewed pressure to the Euro.

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TAGS: Pound Euro Forecasts