Pound-to-Euro Forecast: GBP Pulls Back as EUR Recovers

Modified: Friday, 15 August 2025 13:35 BST - Written by Tim Boyer

STORY LINK Pound-to-Euro Forecast: GBP Pulls Back as EUR Recovers

1. Live rates update:


2. GBP/EUR 1.16021 (-0.1%)


GBP/USD 1.3549 (+0.14%)

The Pound to Euro exchange rate (GBP/EUR) hit 6-week highs just above 1.1630 on Thursday, but failed to break through this resistance area and retreated to near 1.16 on Friday as the Euro recovered ground in global markets.

The immediate focus will be on Friday’s talks between US President Trump and Russian President Putin.

It is doubtful whether there will be major developments ahead of Friday’s market close and there will, therefore, be an element of position adjustment into today’s close. There will be the risk of a spike at Monday’s Asian open.

The impact on energy prices will be an important element for the Euro and have an impact on GBP/EUR. Lower energy prices would tend to underpin the Euro.

To some extent, the Pound and Euro are likely to move in tandem as any progress towards a ceasefire would also support the Pound through positive risk conditions.


ING commented; “The deterioration in the eurozone’s terms of trade has impacted the long-term euro fair value, and some conviction that energy prices could come structurally lower from here could make markets more comfortable with the euro trading at levels inconsistent with a relatively unattractive implied rate.”

Markets are also still debating Thursday’s UK GDP data.

MUFG commented; “Overall, the report is unlikely alter market expectations that the BoE is becoming more cautious over delivering further easing this year. The BoE indicated earlier this month that it is less confident it will continue to cut rates every quarter.”

It added; “The UK rate market is now pricing in less than a 50:50 probability of another 25bps BoE rate cut in November.”

Danske Bank does expect further cuts; “The key concern for the BoE is elevated inflation, but we think it is a matter of time before we see a reversal back to the labour market.”

The outlook for interest rates will be important for the housing market.

The UK RICS house-price survey dipped to -13% for August from -7% previously and compared with consensus forecasts of -4%.


Buyer demand and agreed sales measures fall back into negative territory.

Simon Rubinsohn, chief economist at RICS, commented; “The somewhat flatter tone highlights ongoing challenges facing the housing market. Although interest rates were lowered at the latest Bank of England meeting, the split vote has raised doubts about both the timing and extent of further reductions.

He added; “Meanwhile, uncertainty about the potential contents of the Chancellor’s Autumn Budget is also raising some concerns. Against this backdrop, respondents continue to report that the market remains particularly price-sensitive at the present time.”

ING remains uneasy over the Euro-Zone economic outlook. The latest data recorded a 1.3% decline in industrial production for June following a 1.1% increase the previous month.

According to the bank; “The hoped-for industrial recovery seems to be delayed once again.”

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TAGS: Pound Euro Forecasts