Pound-to-Euro Mid Week Forecast: EUR Steady, GBP Rebounds on Services Strength

Modified: Wednesday, 5 November 2025 22:45 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Mid Week Forecast: EUR Steady, GBP Rebounds on Services Strength

The Pound to Euro exchange rate (GBP/EUR) briefly slipped to a two-and-a-half-year low on Tuesday night before regaining some ground on Wednesday, buoyed by better-than-expected UK services PMI figures.

At the time of writing, GBP/EUR was trading around €1.1348, up 0.2% from its overnight trough but still hovering close to its weakest levels since May 2023.

The Pound (GBP) gained some ground on Wednesday, recovering from a 30-month low after stronger-than-expected PMI data injected a dose of optimism into the market.

The UK’s final services PMI was revised higher to 52.3 from 50.8, beating the preliminary estimate of 51.1. The improvement points to a quicker rebound in activity across the country’s all-important services industry.

The upbeat figures gave Sterling some breathing room as investors continued to weigh the risks surrounding the upcoming autumn budget. Concerns persist that potential tax increases could slow growth and force the Bank of England (BoE) to cut interest rates sooner than anticipated.

Despite Wednesday’s modest recovery, the Pound remained under pressure, still struggling to shake off the broader downtrend that has dominated recent weeks.

The Euro (EUR) found little traction on Wednesday, even as fresh data from the Eurozone pointed to a stronger performance across the region’s economy.

The Eurozone’s services PMI was revised higher to 53 from 51.3, outpacing forecasts of 52.6 and suggesting faster expansion in the sector. Germany also posted encouraging figures, with factory orders rebounding by 1.1% in September after a 0.4% fall in August.

However, these signs of resilience were overshadowed by mounting geopolitical concerns. Reports of drones appearing over civilian airports and military sites in Belgium reignited anxiety over increasing Russian incursions near NATO airspace. The renewed tension kept investors cautious, leaving the single currency on the defensive despite the positive economic backdrop.

GBP/EUR Forecasts: BoE Policy Stance Set to Steer Sterling

Looking ahead, all eyes are on the Bank of England’s interest rate decision on Thursday, which is likely to set the tone for the Pound. Markets broadly expect the BoE to hold rates steady on Thursday, shifting attention to the tone of its forward guidance and the breakdown of the Monetary Policy Committee (MPC) vote.

If policymakers strike a dovish note – suggesting that tighter fiscal conditions could lead to earlier or deeper rate cuts in 2026 – Sterling may come under renewed selling pressure. There’s also a slim but notable risk that the BoE could surprise markets with a rate cut this week, a move that would likely send the Pound sharply lower.

Across the Channel, the Euro could find some near-term support if German industrial production meets forecasts for a 3% rebound in September, hinting at a stabilisation in Europe’s largest economy.

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TAGS: Pound Euro Forecasts