Pound to Euro (GBP/EUR) Flat as Markets Brace for UK Inflation Data

Modified: Tuesday, 18 November 2025 23:00 BST - Written by Ben Hughes

STORY LINK Pound to Euro (GBP/EUR) Flat as Markets Brace for UK Inflation Data

The Pound to Euro exchange rate (GBP/EUR) was confined within a narrow range on Tuesday as investors remained cautious ahead of next week’s highly anticipated UK autumn budget.

At the time of writing the GBP/EUR exchange rate was trading at around €1.1348, leaving the pairing virtually unchanged from the start of the session.

The Pound (GBP) found limited support on Tuesday, with Sterling stuck in a narrow range as uncertainty surrounding Chancellor Rachel Reeves’s upcoming budget continued to weigh on sentiment.

Questions continue to mount over how Chancellor Rachel Reeves will bridge the UK’s sizeable fiscal shortfall while keeping within her fiscal rules.

Although most economists anticipate some blend of higher taxes and squeezed spending, the lack of clarity around which measures Reeves will choose is curbing GBP appetite.

Concerns have also grown following reports she has scrapped plans to raise income tax. A shift that has fuelled doubts over whether the government can raise sufficient revenue without stifling already fragile growth.

The Euro (EUR) also lacked direction on Tuesday as a quiet Eurozone calendar left the single currency without a clear catalyst.

With no major data releases to drive movement, the Euro drifted in line with broader market sentiment, which turned cautious amid a global equity pullback linked to renewed worries over an AI-driven market correction.

This left EUR exchange rates broadly rangebound against most of its major peers.

GBP/EUR Forecast: Cooling UK Inflation to Pressure Sterling?

Looking ahead, Wednesday’s inflation figures are poised to be the key catalyst for the Pound Euro exchange rate.

The UK’s latest consumer price index is expected to show headline inflation easing from 3.8% to 3.6% in October — marking the first slowdown since May.

A softer inflation reading would likely cement expectations for a December Bank of England (BoE) rate cut, which could put renewed pressure on Sterling in mid-week trade.

Meanwhile, the Eurozone will publish its own CPI data on Wednesday. The finalised reading is expected to confirm that inflation cooled from 2.2% to 2.1% last month.

While the impact may be minimal if the data matches initial estimates, any unexpected revisions could spark volatility for the single currency.

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TAGS: Pound Euro Forecasts