Pound to Euro Today: GBP/EUR Flat Despite Strong Services PMI and Hawkish BoE Tone

Modified: Wednesday, 3 September 2025 21:00 BST - Written by David Woodsmith

STORY LINK Pound to Euro Today: GBP/EUR Flat Despite Strong Services PMI and Hawkish BoE Tone

The Pound to Euro (GBP/EUR) was trapped in a narrow range on Wednesday despite the release of some better-than-expected data from the UK.

At the time of writing, the GBP/EUR was trading at around €1.1494, virtually unchanged from Wednesday’s opening levels.

The Pound (GBP) held its ground on Wednesday, buoyed by encouraging domestic data and firm messaging from the Bank of England (BoE), despite a continued rise in UK bond yields.

August’s Services PMI came in stronger than expected, rising to 54.2 from July’s 51.8, marking the highest reading since April and pointing to renewed momentum in the UK’s dominant services sector.

Adding to the supportive backdrop, BoE policymaker Catherine Mann struck a hawkish tone during her remarks at the Global’s London and Westminster Day roundtable, stressing the need for ongoing vigilance in tackling inflation.

While gilt yields climbed further, reflecting expectations of tighter monetary conditions, Sterling remained resilient during mid-week trade.

The Euro (EUR) posted modest gains on Wednesday, supported by remarks from European Central Bank (ECB) President Christine Lagarde.

Speaking at the European Systemic Risk Board’s annual conference, Lagarde highlighted the growing complexity of the financial landscape and stressed the need for clarity and resilience.

These comments reinforced the ECB’s steady approach to monetary policy.

Amid an otherwise quiet macroeconomic backdrop, the Euro drew additional strength from a softening US Dollar (USD), capitalising on their inverse relationship to hold steady during Thursday’s trading session.

GBP/EUR Forecasts: Eurozone Retail Sales Index to Drive Movement

Looking ahead to Thursday’s session, attention turns to the Eurozone’s upcoming retail sales figures, which are set to shape the Pound to Euro (GBP/EUR) exchange rate.

Analysts expect a decline in consumer activity for July, with projections suggesting a drop from 0.3% to -0.2%.

If confirmed, this downturn could weigh heavily on the Euro, potentially undermining the single currency.

Meanwhile, the UK economic calendar will be quiet on Thursday, offering no fresh data releases to steer the Pound.

In the absence of domestic catalysts, GBP may struggle to find direction, leaving its movement largely at the mercy of external drivers.

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TAGS: Pound Euro Forecasts