Pound-to-Euro Slides to €1.15 amid Slowing UK Jobs Market

Modified: Tuesday, 16 September 2025 22:15 BST - Written by Tim Boyer

STORY LINK Pound-to-Euro Slides to €1.15 amid Slowing UK Jobs Market

The Pound Sterling tumbled against the Euro on Tuesday as markets digested the UK’s latest jobs report alongside Germany’s ZEW sentiment survey.

At the time of writing, the GBP/EUR exchange rate was trading at €1.1512, 0.48% below the day’s opening level.

The Pound (GBP) had a mixed performance on Tuesday after the release of fresh UK labour market data.

Figures showed further signs of weakness, with pay growth easing, payroll numbers shrinking, and an increase in benefit claims. Despite the softer tone, Sterling avoided major losses as investors judged the slowdown was unlikely to sway the Bank of England (BoE) from holding interest rates steady at its upcoming policy decision on Thursday.

The Euro (EUR) edged higher on Tuesday after Germany’s ZEW economic sentiment index beat expectations.

The survey showed confidence rising from 34.7 to 37.3, defying forecasts of a steep drop to 26.3. That said, upside for the single currency was curbed as the index’s current conditions measure deteriorated more than anticipated, sliding to a four-month low.

Further support for the Euro came from a softer US Dollar (USD), with the single currency lifted by the Euro’s strong negative correlation with the ‘Greenback’.

The Pound Euro exchange rate could see fresh movement on Wednesday with the release of the UK’s August consumer price index.

Forecasts point to inflation holding steady at 3.8% – nearly double the Bank of England’s 2% target – a result that may harden expectations the bank will keep policy tight through 2025. Such an outcome would likely lend support to Sterling, though gains may be capped as traders wait for Thursday’s BoE decision.

A surprise deviation in the CPI reading could spark sharper moves, with stronger inflation lifting GBP and a weaker print weighing on the currency.

Meanwhile, the Euro may take its lead from a scheduled speech by European Central Bank (ECB) President Christine Lagarde.

If she signals confidence that rates are now at or near neutral levels, EUR could find a steadier footing, while finalised Eurozone CPI figures are unlikely to provide much impetus unless they differ from earlier estimates.

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TAGS: Pound Euro Forecasts