Pound-to-Euro Outlook: GBP at Fresh Lows vs EUR amid Dovish BoE

July 14, 2025 - Written by Tim Boyer

STORY LINK Pound-to-Euro Outlook: GBP at Fresh Lows vs EUR amid Dovish BoE

The Pound to Euro exchange rate (GBP/EUR) kicked off the week on the back foot, pressured by dovish remarks from Bank of England (BoE) Governor Andrew Bailey.

At the time of writing, GBP/EUR was trading at roughly €1.1538, almost unchanged from where it began on Monday.

The Pound (GBP) came under renewed pressure on Monday, after BoE Governor Andrew Bailey struck a cautious note on the UK’s job market.

In comments to The Times, Bailey indicated that further signs of slack in employment could prompt the bank to cut interest rates more swiftly than previously suggested.

He cited rising costs for employers, such as higher national insurance contributions, as part of the drag on the labour market, and reiterated his view that the direction for rates is ‘downward’.

Bailey also raised concerns about the global economic backdrop, noting that trade fragmentation could pose additional challenges for the UK’s recovery and complicate monetary policy decisions.

Markets responded quickly, with the probability of an August rate cut jumping to 85%. Some analysts now believe the BoE could abandon its cautious quarterly pace and opt for faster easing.


Meanwhile, the Euro (EUR) saw limited upside as traders digested a fresh protectionist salvo from former US President Donald Trump.

Over the weekend, Trump announced plans to impose a 30% tariff on goods imported from the EU, effective August 1.

The announcement comes despite ongoing trade negotiations between the EU and the US.

EU Trade Commissioner Maroš Šefčovič insisted a new deal was within reach, though the tariff announcement threw a wrench into market expectations.

Although few believe the full 30% tariffs will be implemented, they are still stoking uncertainty, keeping Euro bulls on the sidelines.

Looking ahead, movement in the Pound to euro exchange rate on Tuesday is likely to be driven by Germany’s ZEW economic sentiment index.

Analysts anticipate another uptick in business morale, which may lend the single currency some support.


As for the Pound, investors may remain cautious until later in the week, as markets await the release of the UK's latest inflation and jobs data, with the latter likely to be of particular note following Bailey’s latest comments.

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TAGS: Pound Euro Forecasts