Pound-to-Euro Mid-Week Forecast: GBP Falls as Labour Market Cools

Modified: Tuesday, 11 November 2025 22:33 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Mid-Week Forecast: GBP Falls as Labour Market Cools

The Pound to Euro exchange (GBP/EUR) rate fell back on Tuesday as weaker-than-expected UK jobs data reignited speculation over an imminent Bank of England (BoE) rate cut.

At the time of writing, GBP/EUR was trading around €1.1348, down roughly 0.4% from Tuesday’s opening levels.

The Pound (GBP) came under heavy selling pressure after the Office for National Statistics (ONS) reported a sharper-than-forecast rise in UK unemployment.

Joblessness climbed from 4.8% to 5% in September, its highest level since May 2021, missing expectations for a smaller uptick to 4.9%.

The increase in unemployment was accompanied by a further cooling in wage growth, with average earnings (excluding bonuses) slipping from 5% to 4.8%.

Economists pointed to tighter financial conditions and uncertainty ahead of the autumn budget, with some also highlighting the lingering drag from Chancellor Rachel Reeves’s previous tax measures.

The data prompted investors to increase bets on a December BoE rate cut, with markets now pricing a 73% probability of a move, pushing Sterling lower across the board.

The Euro (EUR) gained modestly against the Pound, benefiting from a cautious market mood that drove investors toward relatively safer assets.

However, gains for the single currency were tempered by disappointing data from Germany’s ZEW economic sentiment survey, which showed confidence unexpectedly weakening in November instead of the small rebound forecast.

The survey highlighted persistent concerns about Germany’s fiscal outlook, dampening optimism that the Eurozone’s largest economy is recovering sustainably.

GBP/EUR Forecast: UK GDP Data Could Add to Pound Weakness

Looking ahead, the Pound to Euro exchange rate could face renewed downside pressure later in the week if the upcoming UK GDP report confirms a slowdown in growth.

The first estimate for third-quarter GDP is expected to show expansion cooling from 0.3% to 0.2%, which would reinforce the narrative of a weakening UK economy and strengthen the case for BoE easing.

For the Euro, investors will monitor remarks from European Central Bank (ECB) Vice President Luis de Guindos on Wednesday.

If de Guindos maintains a cautious stance on policy or signals concern about the bloc’s growth prospects, the single currency could see its recent gains fade.

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TAGS: Pound Euro Forecasts