British Pound to Euro Forecast: Sterling Muted, Euro Supported by ECB Outlook

Modified: Thursday, 11 September 2025 20:00 BST - Written by Tim Boyer

STORY LINK British Pound to Euro Forecast: Sterling Muted, Euro Supported by ECB Outlook

The Pound-to-Euro exchange rate (GBP/EUR) was trapped in a narrow range on Thursday following the European Central Bank’s (ECB) latest interest rate decision.

At the time of writing, the GBP/EUR was trading at around €1.1551, virtually unchanged from Thursday’s opening levels.

The Euro (EUR) enjoyed support on Thursday, advancing against several major peers in the wake of the European Central Bank’s latest policy announcement.

While its gains were more limited against the Pound (GBP), the single currency firmed elsewhere after the ECB confirmed it would keep interest rates steady at 2.15%, as markets had widely expected.

Beyond holding rates unchanged, policymakers reaffirmed their commitment to a data-driven approach when assessing future moves. This cautious but steady stance was coupled with a notable upgrade to the bloc’s growth outlook, with 2025 forecasts revised higher from 0.9% to 1.2%.

The brighter economic projections added to the Euro’s appeal, helping EUR exchange rates strengthen during Thursday’s trade.

The Pound (GBP) traded on a steady footing through Thursday, showing little movement against most major peers as a lack of UK economic releases left the currency without a clear catalyst.

Caution among investors also kept activity subdued, with markets unwilling to take strong positions on the Pound ahead of Friday’s key GDP report. With the growth figures set to provide the week’s main domestic highlight, GBP exchange rates remained muted as traders waited for fresh direction.

GBP/EUR Exchange Rate Forecast: UK Data to Drive Movement

Friday’s European session is set to bring fresh volatility to the Pound to Euro (GBP/EUR) exchange rate as attention turns to the UK’s latest GDP report.

Economists expect the data to show growth stagnating in July, with the index forecast to fall from 0.4% to flat. Such a result would point to a slowdown in activity and could undermine confidence in the UK’s economic outlook, leaving Sterling under pressure.

In contrast, the Eurozone’s calendar will be quiet heading into Friday, offering no new domestic data to guide the single currency. Without fresh catalysts, EUR movement may be shaped largely by market sentiment, potentially leaving the Euro to close out the week lacking a clear direction.

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TAGS: Pound Euro Forecasts