British Pound to Euro Forecast: Sterling Holds Firm Ahead of UK Jobs Data

Modified: Monday, 11 August 2025 16:18 BST - Written by Tim Boyer

STORY LINK British Pound to Euro Forecast: Sterling Holds Firm Ahead of UK Jobs Data

The Pound to Euro (GBP/EUR) exchange rate consolidated near 1.1550 on foreign exchange markets, close to a one-week best, as GBP Sterling investors continue to digest last week’s Bank of England (BoE) policy decision.

The British Pound’s next move is likely to be shaped by Tuesday’s labour-market data. The latest CoT report from the CFTC revealed the largest short, speculative Pound position since early December 2022, reducing the risk of further GBP selling and raising the potential for short covering if positive data emerges.

GBP/EUR Forecast – 3 Things to Note

• GBP/EUR steadies near 1-week highs as markets await UK labour-market data.
• MUFG drops immediate bearish call but maintains longer-term caution on Sterling.
• Jobs and GDP data this week likely to dictate short-term direction.

The BoE decision and statement did not alter MUFG’s bearish long-term view on the Pound. The bank noted: “We certainly don’t see this meeting as altering the medium-term view and we continue to see the pound likely weakening versus the euro.” It expects further tax hikes in the Autumn will weigh on Sterling, with inflation concerns gradually fading.

However, MUFG has dropped its immediate call for further GBP/EUR weakness and a slide towards 1.1300. “The momentum has turned more favourable and hence we are cutting this trade idea,” the bank added.

The next key test for Sterling will be Tuesday’s labour-market figures. The BoE was relatively calm on jobs in last week’s policy statement, but a notably weak reading could have a significant market impact, even if the data is lagging.

Consensus forecasts point to the unemployment rate holding at a four-year high of 4.7%, alongside a slowdown in annual average earnings growth to 4.7% from 5.0%. Another focus will be payroll numbers — last month’s provisional ONS data showed a 41,000 drop in June, although these figures are often revised higher.


The Pound will be vulnerable if there is another large provisional drop for July. Conversely, a small decline could bolster hawkish voices within the MPC, prioritising inflation control over further rate cuts.

MUFG stressed: “The UK employment data will be key for shaping market expectations on the speed of further rate cuts from the BoE.”

ING also flagged uncertainty, saying: “In the UK, payroll data is likely to confirm that employment has fallen in eight out of the last nine months. Yet, redundancies haven’t risen at all. And surveys suggest hiring is essentially flat. The true picture is far from clear.”

Elsewhere, UK GDP figures are due Thursday, with June expected to show 0.2% growth after a 0.1% decline, while Q2 growth is forecast to slow sharply to 0.1% from 0.7% in Q1.

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TAGS: Pound Euro Forecasts