Pound to Euro Steady Before Labour and CPI Tests

Modified: Monday, 16 February 2026 20:31 BST - Written by David Woodsmith

STORY LINK Pound to Euro Steady Before Labour and CPI Tests

The Pound to Euro exchange rate (GBP/EUR) began the week on an even footing as traders adopted a cautious stance ahead of several major economic releases due in the coming days.

At the time of writing, GBP/EUR was trading close to €1.1501, little changed from Monday’s opening levels.

Sterling traded in a narrow range as investors held back from making bold moves before a busy stretch of UK economic updates.

This week’s calendar includes labour market figures and consumer price index data, both expected to play a key role in shaping expectations for future Bank of England interest rate decisions.

Retail sales and fresh PMI readings are also scheduled for release on Friday, rounding off a potentially pivotal week for the Pound.

Political considerations also lingered in the background. Although tensions in Westminster have eased somewhat since last week, attention is turning to the upcoming Gorton and Denton by-election. A disappointing result for Labour could reignite scrutiny of Prime Minister Keir Starmer’s leadership and inject fresh volatility into Sterling.

The Euro struggled for direction following weak industrial production figures.

Data from Eurostat showed factory output in the bloc contracted sharply in December, falling from 0.3% growth to a decline of 1.4%.

Although the drop was marginally less severe than the 1.5% contraction forecast, it marked the steepest downturn since April 2025 and ended three consecutive months of expansion.

GBP/EUR Forecast: UK Labour Data and German Sentiment in Focus

The Pound to Euro exchange rate could face renewed pressure with Tuesday’s release of the UK’s latest employment statistics.

Economists expect the unemployment rate to remain at its highest level since March 2021, while wage growth is projected to slow for a fifth straight month.

Further evidence of cooling labour market conditions would reinforce expectations of a near-term Bank of England rate cut and potentially weigh on Sterling.

Germany’s ZEW economic sentiment index is also due. Continued improvement in investor confidence could provide the Euro with modest support.

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TAGS: Pound Euro Forecasts