Pound to Euro Stalls

Modified: Thursday, 12 February 2026 20:01 BST - Written by David Woodsmith

STORY LINK Pound to Euro Stalls

The Pound to Euro exchange rate (GBP/EUR) traded in a narrow range on Thursday as investors digested the UK’s latest growth figures, leaving the pair confined below the €1.15 threshold.

At the time of writing, GBP/EUR was hovering around €1.1485, little changed from the start of the session.

The Pound struggled to gain traction following the release of preliminary fourth-quarter GDP data.

Figures from the Office for National Statistics showed the UK economy expanded by just 0.1% in the final three months of 2025. While this matched the pace recorded in the previous quarter, it fell short of expectations for a 0.2% increase.

The weaker-than-forecast reading was largely attributed to a slowdown in the services sector, which lost momentum towards year-end.

On an annual basis, the UK economy is estimated to have grown by 1.3% across 2025, placing it ahead of several European G7 peers.

Even so, the softer quarterly outcome weighed on Sterling, as it reinforced market expectations that the Bank of England may deliver further interest rate cuts in the coming months.

The Euro traded in a similarly tight range, with attention focused on diplomatic developments surrounding Ukraine.

President Volodymyr Zelenskyy confirmed that a third round of talks involving Ukraine, Russia and the United States is likely to take place next week. Discussions are expected to centre on territorial arrangements, including proposals for a US-backed free economic zone in the Donbas region.

While any diplomatic progress is viewed positively, previous negotiations have faltered over territorial disputes, leaving investors cautious about the likelihood of a lasting breakthrough.

GBP/EUR Forecast: Eurozone Growth Data in Focus

Looking ahead, direction in GBP/EUR may hinge on the Eurozone’s own GDP release.

Current projections suggest the bloc maintained quarterly growth of 0.3% in the final quarter of 2025. Confirmation of steady expansion could provide the Euro with modest support.

Investors will also monitor remarks from European Central Bank Vice-President Luis de Guindos. Any indication of a firmer policy stance may lend additional strength to the single currency.

With no major UK data due before the weekend, Sterling is likely to remain driven more by broader sentiment and external developments than by domestic fundamentals.

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TAGS: Pound Euro Forecasts