Pound Sterling Stumbles vs Euro and Dollar on Shock UK GDP

June 12, 2025 - Written by Ben Hughes

STORY LINK Pound Sterling Stumbles vs Euro and Dollar on Shock UK GDP

The Pound Sterling (GBP) fell back against the euro (EUR) and US Dollar (USD) on Thursday as the UK released its latest GDP data.

At the time of writing, the Pound to Euro exchange rate GBP/EUR was trading at around €1.1742, down roughly 0.4% from Thursday’s opening levels.

The Pound to Dollar exchange rate (GBP/USD) traded at 1.35874 (+0.14%).

The Pound (GBP) came under pressure on Thursday, weakening against several major peers in response to a disappointing UK GDP report.

Data from the Office for National Statistics (ONS) showed that the UK economy contracted by 0.3% in April, marking the sharpest monthly fall in 18 months.

The weak growth figures reignited concerns about the UK’s economic resilience and fuelled speculation that the Bank of England (BoE) could begin cutting interest rates as soon as August.

This dovish shift in expectations dragged Sterling lower during Thursday’s European session.


Following the release, Raj Badiani, Economics Director at S&P Global Market Intelligence, said: ‘We still expect the Bank Rate to be maintained at 4.25% in the June meeting, to allow still troubling earnings growth to continue to ease. We anticipate the next rate cuts to occur in the August and November meetings to 3.75%, prompted by mounting economic hardships.’

The Euro (EUR) advanced on Thursday, gaining ground against most of its major peers despite a lack of fresh Eurozone data.

Instead, the single currency was buoyed by broader market dynamics.

A cautious tone dominated global trade, prompting investors to favour safer assets.

As a traditionally stable currency, the Euro benefited from this risk-off mood, climbing particularly against its more volatile counterparts and the Pound.

Looking ahead, movement in the Pound Euro (GBP/EUR) exchange rate on Friday is likely to be driven by a fresh round of economic data from the Eurozone.

The bloc is set to publish its latest industrial production figures and balance of trade data for April.


Both releases are forecast to show a decline, which may raise concerns about the health of the Eurozone’s manufacturing sector and external demand.

If the data prints in line with expectations, the Euro could come under pressure, potentially weakening against the Pound and its other major counterparts.

Meanwhile, the UK’s economic calendar is set to remain empty on Friday, likely leaving Sterling to drift in response to broader market sentiment in the absence of any domestic catalysts.

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TAGS: Pound Dollar Forecasts Pound Euro Forecasts