Pound to Euro Near €1.16 as Oil Prices Rise

Modified: Thursday, 12 March 2026 17:46 BST - Written by David Woodsmith

STORY LINK Pound to Euro Near €1.16 as Oil Prices Rise

The Pound to Euro (GBP/EUR) exchange rate remained largely flat on Thursday as renewed gains in global oil prices once again shaped market sentiment.

At the time of writing, GBP/EUR was trading close to €1.1587, little changed from the start of Thursday’s session.

The Euro struggled to gain momentum as the renewed rise in oil prices weighed on investor confidence.

Energy markets were unsettled after reports that Iran had intensified efforts to disrupt supply routes in the region, including further strikes on shipping and energy infrastructure. As a result, crude prices climbed back toward the $100-per-barrel mark.

The heightened geopolitical tension prompted a shift toward safe-haven assets, boosting demand for the US Dollar and leaving the Euro on the defensive due to the currencies’ typical inverse relationship.

Nevertheless, the single currency found some underlying support as investors speculated that higher energy costs could push inflation higher across the Eurozone. This has fuelled expectations that the European Central Bank may be forced to consider tighter monetary policy later in the year.

The Pound also struggled to establish a clear trend, trading sideways against the Euro and most other major currencies.

With no significant UK economic data released, market attention remained firmly fixed on developments in global energy markets and the potential implications for the British economy.

Investors remain wary that sustained high energy prices could increase stagflation risks in the UK and potentially strain public finances if the government is forced to introduce additional support measures for households facing higher bills.

Despite these concerns, Sterling’s downside was limited as markets continued to speculate that the Bank of England could be compelled to tighten monetary policy later this year if inflation pressures intensify.

GBP/EUR Forecast: UK Growth Data in Focus

Alongside ongoing developments in the Middle East, the Pound to Euro exchange rate may also react to the release of the UK’s latest GDP figures toward the end of the week.

Economists expect January’s monthly growth reading to show a modest improvement, with the economy forecast to expand by 0.2% compared with the previous month’s 0.1% increase. Such a result could provide some support for Sterling.

However, given the rapidly evolving geopolitical backdrop, the figures may appear somewhat outdated, which could limit their impact on the currency.

At the same time, the Euro may receive modest backing if upcoming data shows a rebound in Eurozone industrial production.

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TAGS: Pound Euro Forecasts