Pound-to-Euro Rate Steady Despite BoE's Pill Joining "Team Cut"

June 20, 2025 - Written by Frank Davies

STORY LINK Pound-to-Euro Rate Steady Despite BoE's Pill Joining "Team Cut"

The Pound Euro (GBP/EUR) exchange rate traded sideways on Thursday following the Bank of England’s (BoE) June interest rate meeting.

At the time of writing, the GBP/EUR was trading at around €1.1700, virtually unchanged from Thursday’s opening levels.

The Pound (GBP) soared against its riskier-sensitive peers on Thursday, supported by a cautious market mood.

However, movement in the rest of Sterling’s trade was relatively subdued as investors reacted to the Bank of England’s (BoE) latest policy update.

As expected, the BoE left interest rates on hold, but the decision exposed a growing split among policymakers, with three of the nine Monetary Policy Committee (MPC) members voting to cut rates.

The bank also struck a more cautious tone, pointing to recent signs of economic fragility, including soft GDP data and a cooling labour market.

Even so, with a rate hold already priced in and inflation still above target, the Pound managed to hold its ground through Thursday’s European session.


"GBP is soft and trading defensively into Thursday’s NA session with markets unphased by the BoE’s as-expected hold at 4.25% but offering some reaction to a 7-3 hold-cut split," say Scotiabank economists in a brief to clients on Thursday.

"Recent voting at the BoE has been mixed, with the prior meeting offering a 2-5-2 hike-hold-cut distribution as policymakers weighed the uncertainties posed by tariffs.

"A return to a neutral/dovish bias was expected, however we think it important to note that the latest addition to ‘team cut’ is the BoE’s Chief Economist Huw Pill.

"We remain medium-term GBP bulls, primarily on the basis of Fed-driven USD weakness rather than GBP strength."

The Euro (EUR) experienced mixed movement on Thursday, gaining ground against some currencies while weakening against others.

A risk-off mood driven by geopolitical tensions in the Middle East offered the single currency some support, thanks to its safe-haven appeal.

However, the Euro’s gains were capped by the US Dollar’s (USD) strong performance.


As the ‘Greenback’ advanced broadly on the back of renewed safe-haven demand and a hawkish Fed outlook, the Euro struggled due to its inverse relationship with USD.

Looking ahead to Friday, movement in the Pound Euro (GBP/EUR) exchange rate is likely to hinge on the UK’s upcoming retail sales report.

Markets expect a notable drop in consumer spending, with May’s figures forecast to show a 0.6% contraction following a 1.2% rise in April.

If confirmed, the data could reignite concerns over the UK’s economic resilience and put renewed pressure on the Pound.

Meanwhile, the Euro may react to the Eurozone’s latest consumer confidence flash reading.

Forecasts suggest a slight improvement in sentiment, which could lend the single currency some modest support.

However, any unexpected decline in confidence may weigh on EUR exchange rates heading into the weekend.

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TAGS: Pound Euro Forecasts