GBP/EUR Forecast: Pound Weakens as Reeves Faces Fiscal Balancing Act

Modified: Thursday, 9 October 2025 23:15 BST - Written by James Fuller

STORY LINK GBP/EUR Forecast: Pound Weakens as Reeves Faces Fiscal Balancing Act

The Pound-to-Euro exchange rate (GBP/EUR) dipped on Thursday as growing speculation surrounding the UK’s Autumn Budget weighed on investor sentiment.

At the time of writing, the GBP/EUR was trading at around €1.1508, down roughly 0.2% from Thursday’s opening levels.

The Pound (GBP) fell against the majority of its major peers on Thursday, as a lack of fresh UK data left the currency vulnerable to external and political influences.

Market attention was firmly fixed on mounting speculation surrounding next month’s Autumn Budget, with reports indicating that Chancellor Rachel Reeves could unveil a mix of tax increases and spending reductions to tackle the UK’s fiscal deficit.

The prospect of tighter fiscal measures unsettled investors, prompting a cautious mood towards Sterling and triggering renewed selling pressure.

As such, the Pound weakened across the board during Thursday’s European trading session.

The Euro (EUR) remained largely stable on Thursday, even gaining against several of its peers, supported in part by the prevailing market sentiment.

As a key safe-haven currency, the single currency benefitted from the day’s risk-off conditions, allowing EUR exchange rates to catch some bids.

However, caution prevailed among investors ahead of the European Central Bank (ECB)’s upcoming meeting minutes, limiting aggressive positioning on the Euro.

Should the ECB’s minutes signal a hawkish stance on future monetary policy, the single currency could see further gains, potentially ending Thursday’s European session stronger across the board.

Pound to Euro Forecast: Limited Data to Leave Pair at Mercy of Market Mood

Looking ahead to Friday’s European session, the GBP/EUR exchange rate is expected to be shaped primarily by market sentiment, with no major UK or Eurozone data scheduled for release.

If risk-off conditions from Thursday persist into Friday, the Euro could remain supported, keeping the GBP/EUR pair on the back foot.

Equally, a more upbeat market mood could lend Sterling some support, given the Pound’s growing sensitivity to risk, potentially allowing GBP/EUR to close the week on a firmer footing.

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TAGS: Pound Euro Forecasts