Pound-to-Euro Forecast: GBP/EUR Firm after "Knife-Edge" BoE Vote

Modified: Thursday, 6 November 2025 22:30 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Forecast: GBP/EUR Firm after "Knife-Edge" BoE Vote

The Pound to Euro (GBP/EUR) exchange rate traded flat on Thursday after the Bank of England’s (BoE) latest policy decision revealed a tighter-than-expected split among rate-setters.

At the time of writing, GBP/EUR was trading around €1.1369, little changed from Thursday’s opening levels.

The Pound (GBP) found support after the BoE opted to hold interest rates at 4%, as widely expected.

However, the surprise came in the form of the 5–4 vote split within the Monetary Policy Committee (MPC), with four members favouring an immediate cut. The narrow margin signalled a more divided central bank, suggesting that the debate over how long to maintain restrictive policy is intensifying.

The BoE maintained that inflation, at 3.8%, has likely peaked but remains well above the 2% target, while growth continues to weaken. Officials indicated they would prefer to gauge the impact of Chancellor Rachel Reeves’s upcoming autumn budget before making any major policy adjustments.

Markets welcomed the BoE’s reluctance to cut rates prematurely, but expectations for a potential move in December limited the Pound’s upside, leaving GBP/EUR broadly rangebound through Thursday’s European session.

The Euro (EUR), meanwhile, faced headwinds from underwhelming economic data.

Germany’s industrial production rose 1.3% in September, short of forecasts for a stronger 3% rebound, while Eurozone retail sales unexpectedly fell 0.1% against an anticipated 0.2% increase.

The weak data added to evidence of sluggish growth across the bloc and revived speculation that the European Central Bank (ECB) may yet consider easing policy further if activity fails to recover.

GBP/EUR Forecast: German Trade Data to Set the Tone

Looking to Friday, attention will turn to Germany’s latest trade figures, which could influence near-term movement in the Pound Euro exchange rate.

A rebound in exports could offer the Euro some support heading into the weekend, though a narrowing trade surplus may keep optimism contained.

With no major UK data releases scheduled, Sterling’s direction will likely hinge on market sentiment and ongoing speculation surrounding fiscal tightening in next month’s budget.

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TAGS: Pound Euro Forecasts