Pound to Euro Firms Following UK GDP Figures

Modified: Monday, 22 December 2025 21:31 BST - Written by David Woodsmith

STORY LINK Pound to Euro Firms Following UK GDP Figures

The Pound to Euro exchange rate (GBP/EUR) edged higher on Monday, shaking off some early volatility after the release of the UK’s latest GDP figures.

At the time of writing, GBP/EUR was hovering around €1.1446, up roughly 0.2% from Monday’s opening levels.

The Pound (GBP) found support as markets digested the UK’s final major data release of the year — the revised GDP figures.

Data from the Office for National Statistics showed the UK economy grew by just 0.1% in the third quarter, in line with earlier estimates. However, the release also included a downward revision to second-quarter growth, which was trimmed from 0.3% to 0.2%.

The figures reinforced concerns that economic momentum is fading, reviving speculation that prolonged weak growth could encourage the Bank of England (BoE) to extend its rate-cutting cycle into 2026. These worries have been compounded by scepticism over the growth impact of Chancellor Rachel Reeves’s autumn budget.

Lindsay James, investment strategist at Quilter, commented: “Going forward, November’s Budget measures will do nothing for growth after the OBR forecasted zero impact from the policies introduced at the despatch box.”

Even so, the data was not entirely negative for Sterling. Evidence that household spending accelerated in the third quarter offered a tentative sign of resilience in consumer demand, helping the Pound retain a firmer footing.

The Euro (EUR) also lacked direction on Monday, with a quiet Eurozone data calendar providing little impetus.

Thin liquidity during the holiday period further dampened trading activity, keeping EUR ranges tight. As a result, the single currency took its cues from broader market sentiment, with a mildly risk-positive tone weighing on demand for the traditionally defensive Euro.

GBP/EUR Forecast: Fed Rate Decision to Loom over the Euro?

Looking ahead to midweek, movements in the Pound to Euro exchange rate may be shaped by shifts in the US Dollar, given the Euro’s inverse relationship with the greenback.

If upcoming US GDP data confirms a slowdown in third-quarter growth, the Dollar could weaken, potentially offering some support to the Euro.

Meanwhile, with no major UK economic releases scheduled, Sterling may lack a clear domestic catalyst and trade without strong direction in the near term.

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TAGS: Pound Euro Forecasts