Pound Sterling Finds Against Euro Support from Mann’s Hawkish Tone

Modified: Wednesday, 1 October 2025 22:15 BST - Written by Frank Davies

STORY LINK Pound Sterling Finds Against Euro Support from Mann’s Hawkish Tone

The Pound to Euro (GBP/EUR) exchange rate moved sideways on Wednesday, with the single currency supported by firmer inflation data while Sterling found modest backing from hawkish Bank of England commentary.

At the time of writing, GBP/EUR was holding close to €1.1467, almost unmoved from where it opened the session.

The Euro (EUR) lacked momentum mid-week despite confirmation that Eurozone inflation picked up in September.

Flash estimates from Eurostat revealed consumer prices climbed from 2% to 2.2%, the fastest pace since April.

However, as the result had been widely anticipated, EUR investors largely took it in their stride, limiting the Euro’s immediate upside potential.

Even so, the increase reinforced expectations that the European Central Bank (ECB) has likely concluded its cycle of rate cuts, providing some underlying support to the single currency.

The Pound (GBP) drew some strength on Wednesday after hawkish commentary from Bank of England (BoE) policymaker Catherine Mann.

Speaking to Bloomberg, Mann argued inflation risks remain tilted to the upside, remarking that higher-than-expected price growth is already ‘playing out’.

She also stressed that policy settings remain relatively loose against current inflationary pressures, reiterating that holding rates at 4% remains appropriate.

While Mann is one of the BoE’s most hawkish voices, and her comments were broadly expected, they nonetheless helped reinforce investor expectations that UK interest rates will not be cut in the fourth quarter as previously speculated.

GBP/EUR Forecasts: Bailey and Lagarde Speeches in Focus

Looking ahead, Thursday’s speech from BoE Governor Andrew Bailey will likely set the tone for Sterling.

Should Bailey echo Mann’s hawkish stance and highlight the risks of sticky inflation in the UK, markets may further scale back expectations for future BoE cuts, lending further support to the Pound.

On the Euro side, a speech by ECB President Christine Lagarde later this week could provide fresh direction.

If Lagarde signals confidence that the ECB’s easing cycle is over, it could bolster EUR demand.

In the background, ongoing weakness in the US Dollar (USD) linked to the US government shutdown may indirectly support the Euro through the Greenback’s strong negative correlation with the single currency.

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TAGS: Pound Euro Forecasts