Pound-to-Euro Forecast: GBP/EUR Rises as Markets Doubt Lecornu’s Return

Modified: Monday, 13 October 2025 23:30 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Forecast: GBP/EUR Rises as Markets Doubt Lecornu’s Return

The Pound to Euro exchange rate (GBP/EUR) traded with modest gains at the start of this week, supported by the potential for fresh political instability in France.

At the time of writing, GBP/EUR was holding close to €1.1504, up around 0.2% from Monday’s opening levels.

The Euro (EUR) struggled for direction on Monday after French President Emmanuel Macron reappointed Sébastien Lecornu as Prime Minister, only days after his unexpected resignation.

While the move temporarily staved off the threat of snap elections, investors remain unconvinced that Lecornu’s reappointment will deliver lasting stability.

The Prime Minister has been instructed to submit a new budget to parliament, but given the deep political fractures within France’s National Assembly, many analysts see this as a near-impossible task.

Many analysts warn that a fresh no-confidence vote could send Macron back to square one, leaving few viable options to avoid new elections and prolonging political paralysis in the Eurozone’s second-largest economy.

Although the Pound (GBP) advanced against the Euro, its broader performance remained mixed on Monday amid ongoing worries about the UK’s fiscal outlook.

Investors were rattled by warnings from the Institute for Fiscal Studies (IFS), which cautioned that Chancellor Rachel Reeves risks inflicting ‘unnecessary economic damage’ if her autumn budget prioritises political optics over economic substance.

Markets are increasingly concerned that Reeves may have no choice but to pursue tough fiscal measures – including tax rises and spending cuts – to keep government borrowing in check while maintaining her self-imposed fiscal targets.

GBP/EUR Forecast: Cooling UK Jobs Data to Test Sterling

Looking ahead, Tuesday’s UK labour market figures are expected to drive movement in the Pound Euro exchange rate.

If August’s report shows a further softening in employment, it could reignite expectations for another Bank of England (BoE) interest rate cut before the end of the year, a scenario likely to drag Sterling lower.

Meanwhile, EUR investors will turn their attention to Germany’s ZEW economic sentiment survey.

Should morale in the Eurozone’s largest economy continue to improve, it could help offset some of the Euro’s recent losses against the Pound.

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TAGS: Pound Euro Forecasts