Pound-to-Euro Forecast: GBP/EUR Flat as ECB Stays in Its 'Good Place'

Modified: Friday, 31 October 2025 07:00 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Forecast: GBP/EUR Flat as ECB Stays in Its 'Good Place'

The Pound to Euro (GBP/EUR) exchange rate was little changed on Thursday after the European Central Bank (ECB) left interest rates on hold and struck a measured tone, highlighting stronger growth while signalling no rush to adjust policy further.

The Euro (EUR) was broadly steady on Thursday after the ECB opted to keep its deposit rate unchanged at 3.75% and reiterated that monetary policy is in a “good place.”

In comments following the meeting, President Christine Lagarde acknowledged the pickup in Eurozone growth and suggested the bank remains comfortable maintaining its current stance for the foreseeable future.

Analysts at ING said the ECB “keeps rates on hold, celebrates stronger growth and looks determined to stay in its current ‘good place’ for as long as possible.”

The tone of the statement dampened speculation that policymakers could move towards earlier easing, helping the Euro stabilise after a cautious pre-meeting session.

Meanwhile, preliminary GDP data for the third quarter showed modest improvement, while inflation continued to cool in Germany — reinforcing the view that the ECB can afford to remain patient.

The Pound (GBP) spent the session trading narrowly as traders digested ongoing concerns surrounding next month’s Autumn Budget.

Reports suggesting the UK government faces a £20 billion fiscal gap due to weak productivity growth continued to limit Sterling’s upside potential.

While the Pound managed to avoid further steep losses, investor caution kept GBP exchange rates subdued, with little fresh data to shift sentiment.

GBP/EUR Forecasts: Eurozone Data and UK Fiscal Sentiment in Focus

Looking to the end of the week, the Euro could see limited follow-through from the ECB decision as attention turns to incoming data.

Germany’s retail sales and the Eurozone’s flash CPI for October will be key. Any downside surprise in inflation could reignite speculation of a future rate cut, capping Euro gains.

For the Pound, fiscal concerns remain the dominant theme. With no major UK data due, Sterling may continue to track broader market sentiment, likely keeping GBP/EUR confined within recent ranges.

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TAGS: Pound Euro Forecasts