Pound to Euro Firm

Modified: Monday, 9 March 2026 19:01 BST - Written by David Woodsmith

STORY LINK Pound to Euro Firm

The Pound to Euro (GBP/EUR) exchange rate traded in a tight range at the beginning of the week, with both currencies restrained by growing concern over the sharp rise in global oil prices.

At the time of writing, GBP/EUR was sitting close to €1.1545, little changed from the opening levels recorded on Monday morning.

The Euro struggled to gain traction as crude oil prices climbed beyond $100 per barrel for the first time in several years.

Brent crude surged sharply, briefly topping $107 a barrel during early trading, as supply fears intensified amid continued disruption to shipping routes through the Strait of Hormuz following the conflict involving Iran, the US, and Israel.

Because the Eurozone relies heavily on imported energy, the rapid escalation in oil and gas prices has raised concerns about the region’s economic resilience. Higher fuel costs could weigh on growth while simultaneously fuelling inflationary pressures.

The single currency also faced additional pressure after Germany released disappointing factory orders and industrial production data, highlighting a weak start to the year for the country’s manufacturing sector.

Sterling also lacked clear momentum as investors weighed the implications of higher energy prices for the UK economy.

Economists estimate that the latest jump in oil and gas prices could add roughly half a percentage point to UK inflation over the coming months. As a result, expectations for a near-term interest rate cut from the Bank of England have faded, while some analysts have begun to discuss the possibility of a tightening of monetary policy.

The growing risk of stagflation unsettled financial markets, pushing UK borrowing costs sharply higher. Yields on two-year government bonds climbed rapidly, marking their fastest rise since the turmoil sparked by the 2022 mini-budget.

Short-Term GBP/EUR Forecast: Energy Markets in Focus

In the days ahead, the Pound to Euro exchange rate is likely to remain sensitive to developments in global energy markets.

Reports that G7 finance ministers are considering releasing emergency oil reserves could help ease some of the pressure on prices if implemented, which might provide modest relief for both Sterling and the Euro.

However, unless energy markets stabilise meaningfully, any recovery in either currency may prove limited as investors continue to grapple with the economic risks posed by persistently high fuel costs.

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TAGS: Pound Euro Forecasts