Pound to Euro Pressured by Westminster Uncertainty

Modified: Monday, 8 December 2025 17:31 BST - Written by David Woodsmith

STORY LINK Pound to Euro Pressured by Westminster Uncertainty

The Pound-to-Euro exchange rate (GBP/EUR) slipped on Monday after stronger-than-expected German industrial output gave the single currency an early lift.

At the time of writing, GBP/EUR was trading at €1.1428, hovering close to its lowest level in five days.

The Euro (EUR) enjoyed early momentum on Monday after Germany’s latest industrial production report beat expectations by a wide margin.

Output surged 1.8% in October — far above forecasts for a 0.4% decline — marking the strongest monthly expansion since March.

The upbeat result from the Eurozone’s largest economy helped lift sentiment toward the single currency, allowing the Euro to find support despite broader market uncertainty.

The Pound (GBP) struggled to hold its ground on Monday as renewed political turbulence in Westminster weighed on Sterling sentiment.

Reports emerged that Labour Together — a prominent thinktank within the party — has been surveying members on who they believe should lead Labour into the next general election. The questionnaire reportedly includes Prime Minister Keir Starmer and eight senior Labour figures.


The development has revived speculation that Starmer could face a leadership challenge in May 2026 if Labour performs poorly in local elections.

Such political uncertainty tends to unsettle markets, and the prospect of instability at the top of government dragged on demand for the Pound.

Pound to Euro Outlook: BoE Bailey Speech to Weigh on the Pound?

Looking ahead, Tuesday’s session begins with Germany’s latest trade balance figures. Economists expect export growth to ease by 0.2% in October, alongside only a modest 0.2% rise in imports. Such muted results could expose the Euro to downside pressure if they highlight ongoing softness in external demand.

The single currency may also struggle if fading hopes for progress toward a Russia–Ukraine peace deal continue to unsettle investors.

For the Pound, focus turns to a speech from Bank of England (BoE) Governor Andrew Bailey on Tuesday morning. With the bank’s final interest rate decision of 2025 just a week away, markets will scrutinise every word for clues on policy direction. Any signals that the BoE is preparing to cut rates could place fresh pressure on Sterling.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Pound Euro Forecasts