Pound-to-Euro Holds Firm After Budget Boost

Modified: Thursday, 27 November 2025 22:01 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Holds Firm After Budget Boost

The Pound to Euro exchange rate (GBP/EUR) traded sideways on Thursday, holding just below the four-week high reached in the wake of the UK’s long-awaited autumn budget.

At the time of writing, GBP/EUR was trading around €1.1409, virtually unchanged from Thursday’s opening levels.

The Pound (GBP) paused for breath after GBP/EUR surged to a fresh four-week high on Wednesday following the publication of the government’s fiscal plans.

After an extended period of speculation surrounding Chancellor Rachel Reeves’s autumn budget, markets broadly welcomed the clarity finally delivered.

Sterling’s gains were supported by the view that the government had managed to create additional fiscal headroom without resorting to aggressive tax increases that might suppress economic growth.

This positive sentiment was reinforced by the Office for Budget Responsibility (OBR), whose updated projections pointed to stronger economic growth in 2025 and a smaller fiscal shortfall than anticipated.

Even so, analysts caution that the budget is unlikely to deter the Bank of England (BoE) from cutting interest rates in December — a factor that may cap Sterling’s upward momentum.

The Euro (EUR) also traded sideways on Thursday, with investors watching developments surrounding renewed efforts to broker a peace framework between Ukraine and Russia.

A meaningful breakthrough would deliver a major boost to Euro sentiment, though markets remain wary given the number of unsuccessful attempts over the past two years.

Although officials have pointed to progress in recent days, several sticking points remain unresolved, and discussions are expected to continue into next week.

GBP/EUR Forecast: Germany’s Inflation Data and Labour Figures in Focus

Looking to Friday, the Pound to Euro exchange rate is likely to take its cue from Germany’s latest inflation data.

Economists expect November’s CPI flash estimate to show price pressures firming slightly — a result that may reinforce expectations that the European Central Bank (ECB) has reached the end of its cutting cycle.

Germany’s labour market data will also be under scrutiny. Any increase in joblessness could temper Euro gains, even if inflation surprises to the upside.

For the Pound, with no major UK data scheduled, movement is likely to be driven by continued analysis of the autumn budget and speculation over the Bank of England’s next policy move.

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TAGS: Pound Euro Forecasts