Pound to Euro Rises on Resignation of French PM

Modified: Monday, 6 October 2025 21:30 BST - Written by Frank Davies

STORY LINK Pound to Euro Rises on Resignation of French PM

The Pound to Euro exchange rate (GBP/EUR) gained ground at the start of the week after the sudden resignation of France’s newly appointed Prime Minister, Sébastien Lecornu, triggered fresh political uncertainty in Paris.

At the time of writing, GBP/EUR was holding close to €1.15118, up roughly 0.3% from the start of Monday’s session.

The Euro (EUR) came under pressure on Monday after French Prime Minister Sébastien Lecornu unexpectedly stepped down less than a month into his tenure.

Lecornu’s resignation, which came shortly after unveiling a new cabinet, reignited fears over France’s deepening political divisions and the government’s inability to push through key fiscal reforms.

With public debt already standing at more than 110% of GDP, concerns are mounting that France’s failure to deliver a credible 2026 budget could further erode investor confidence in the Eurozone’s second-largest economy.

The ongoing political chaos has also fuelled speculation about President Emmanuel Macron’s own position, with some analysts warning that continued instability could strengthen the hand of the far-right National Rally party.

These fears overshadowed the release of the Eurozone’s latest retail sales data, which may have otherwise lent some modest support to the single currency after reporting a rebound in sales growth in August.

The Pound (GBP) enjoyed moderate gains against the Euro on Monday but struggled to build momentum against other major currencies.

Cautious sentiment prevailed among GBP investors ahead of a scheduled speech by Bank of England (BoE) Governor Andrew Bailey later in the day.

GBP investors look to Bailey to shed more light on the central bank’s near-term policy direction.

Should he reaffirm that further rate cuts remain on the table, the Pound may come under renewed pressure.

GBP/EUR Forecasts: French Political Uncertainty to Dominate

Looking ahead, France’s ongoing political crisis is likely to remain a key driver of movement in the Pound to Euro (GBP/EUR) exchange rate.

If signs emerge that President Macron’s position is weakening, or if political instability intensifies, the Euro could come under further selling pressure.

Meanwhile, comments from European Central Bank (ECB) President Christine Lagarde on Tuesday may provide the next key test for the single currency.

With no major UK data due, Sterling’s movement is expected to follow broader market sentiment in the near term.

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TAGS: Pound Euro Forecasts