Pound Sterling Falls vs Euro Falls on Weak UK Jobs

Modified: Tuesday, 14 October 2025 21:45 BST - Written by Frank Davies

STORY LINK Pound Sterling Falls vs Euro Falls on Weak UK Jobs

The Pound Euro (GBP/EUR) exchange rate fell on Tuesday as downbeat UK labour market figures weighed on Sterling sentiment.

At the time of writing, GBP/EUR was trading around €1.1482, marking a decline of roughly 0.3% on the day.

The Pound (GBP) slipped on Tuesday after the UK’s latest labour market data pointed to a further cooling in employment conditions.

Figures from the Office for National Statistics (ONS) revealed that unemployment rose to 4.8% in the three months to August – the highest level in four years and above expectations.

Meanwhile, regular pay growth eased slightly from 4.8% to 4.7%, reinforcing signs that wage pressures are easing.

Additional data for September showed a 25,800 jump in unemployment benefit claims and a 10,000 drop in payrolled employees, underlining the slowdown in the jobs market.

The weaker data fuelled speculation that the Bank of England (BoE) could cut interest rates again before the end of the year, weighing on Sterling sentiment.

The Euro (EUR) gained ground on Tuesday, holding firm despite mixed results from Germany’s latest ZEW economic sentiment survey.

The October report showed investor confidence in Europe’s largest economy improving from 37.3 to 39.3, falling short of the expected 40.5.

Although the rise was smaller than forecast, the index still reached its highest level since July, hinting at tentative optimism among analysts about Germany’s outlook.

This modest uptick, combined with a more risk-averse market mood, helped the single currency advance against its rivals.

The Euro’s relative stability made it an appealing choice for investors wary of the broader market uncertainty, particularly as the Pound struggled under renewed Bank of England rate-cut speculation.

GBP/EUR Forecast: Central Bank Commentary to Steer Direction

Looking ahead, attention is turning to comments from key policymakers at the Bank of England and the European Central Bank (ECB), with speeches from Dave Ramsden, Sarah Breeden, and Luis de Guindos likely to influence the Pound Euro exchange rate.

If BoE Deputy Governors Ramsden and Breeden highlight rising unemployment and easing wage growth as signs of a softening economy, expectations for another rate cut this year could intensify – potentially extending Sterling’s losses.

Across the Channel, remarks from ECB Vice-President de Guindos may also sway the Euro’s trajectory.

Any indication that inflation is on track and that policy settings are already neutral could lend the single currency support.

However, the Eurozone’s latest industrial production figures may temper gains.

Forecasts point to a 1.5% contraction in output for August, and such a steep decline could drag on EUR sentiment.

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TAGS: Pound Euro Forecasts