Pound to Euro Higher Ahead of UK Inflation

Modified: Monday, 17 November 2025 23:30 BST - Written by Tim Boyer

STORY LINK Pound to Euro Higher Ahead of UK Inflation

The Pound to Euro exchange rate (GBP/EUR) traded sideways on Monday after the European Commission released its latest economic outlook.

At the time of writing, GBP/EUR was trading around €1.1350, leaving the pair virtually unchanged from the start of the session.

The Euro (EUR) struggled to generate momentum at the start of the week, with the single currency finding itself pulled in different directions.

On the supportive side, the European Commission upgraded its 2025 Eurozone growth forecast to 1.3%, up from 0.9%.

The EC attributed the improvement to a stronger-than-expected start to the year, helped by a surge in exports as firms accelerated shipments ahead of new US tariffs introduced by President Donald Trump.

Even so, the Euro’s upside was limited by its inverse correlation with the US Dollar (USD).

The Greenback rose through Monday’s session as investors further scaled back expectations for Federal Reserve interest rate cuts, capping any meaningful EUR gains.

The Pound (GBP), meanwhile, moved broadly sideways amid mounting anxiety ahead of the UK’s autumn budget.

Markets remain uncertain about the scale of the fiscal gap facing the government and which measures Chancellor Rachel Reeves may introduce to close it.

After signalling earlier that income tax may rise, reports of a late-week reversal jolted UK borrowing costs and dragged the Pound lower on Friday.

At the same time, growing speculation of a Bank of England (BoE) rate cut in December is keeping a lid on Sterling’s recovery prospects, with investors increasingly convinced that easier policy is coming.

GBP/EUR Forecast: Sterling Awaits UK Inflation Data

Looking ahead, GBP/EUR could remain rangebound into Tuesday as investors hold off on large positions ahead of key UK inflation data later in the week.

Wednesday’s consumer price index (CPI) release is expected to show that inflation cooled for the first time since May.

A soft reading could cement expectations for a December BoE rate cut and weigh further on the Pound.

With no major Eurozone releases scheduled until later in the week, broader risk sentiment and US Dollar dynamics are likely to dictate Euro movement in the near term.

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TAGS: Pound Euro Forecasts