Pound to Euro Softens as Budget Jitters Build

Modified: Monday, 24 November 2025 22:35 BST - Written by David Woodsmith

STORY LINK Pound to Euro Softens as Budget Jitters Build

The Pound to Euro exchange rate (GBP/EUR) edged lower on Monday, unwinding a portion of the gains achieved late last week.

At the time of writing, GBP/EUR was trading around €1.1341, down roughly 0.3% from Monday’s opening levels.

The Pound (GBP) lacked direction on Monday as investors remained nervous ahead of Wednesday’s crucial budget.

Speculation over the measures Chancellor Rachel Reeves might deploy to fill the estimated £20bn fiscal deficit has weighed on sentiment, with the prolonged uncertainty seen as a drag on recent economic activity.

Former Bank of England Chief Economist Andy Haldane told the BBC over the weekend that the “fiscal fandango” surrounding the budget is “the single biggest reason why growth has flatlined” through the second half of the year.

With expectations of tax rises and spending restraint dominating the discussion, investors fear that Wednesday’s announcements could further pressure the UK’s already-fragile growth outlook.

The Euro (EUR) found support on Monday, benefiting from a downturn in the US Dollar (USD), to which it is often inversely correlated.

The US Dollar began the week on the back foot after dovish comments from Federal Reserve policymaker John Williams on Friday pushed market odds for a December rate cut to around 75%.

However, gains for the Euro were tempered by disappointing sentiment data from Germany, where the Ifo business climate index unexpectedly weakened, underscoring persistent concerns in Europe’s largest economy.

GBP/EUR Forecast: Sterling to Stay Rangebound Ahead of Wednesday’s Budget?

Looking ahead, GBP/EUR movement is likely to remain muted on Tuesday as markets continue to avoid major positioning ahead of the UK budget.

The Confederation of British Industry’s distributive trades survey may offer a brief interruption, though with sales volumes expected to decline for the 14th consecutive month, the data risks adding to existing pessimism around Sterling.

With no major Eurozone releases due, the Euro is likely to take its direction from broader market trends. If the US Dollar remains under pressure, the single currency could retain a mild upward bias.

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TAGS: Pound Euro Forecasts