Pound to Euro Edges Higher after GDP and CPI Data

Modified: Tuesday, 31 March 2026 21:01 BST - Written by David Woodsmith

STORY LINK Pound to Euro Edges Higher after GDP and CPI Data

The Pound Euro (GBP/EUR) exchange rate inched up on Tuesday as investors reacted to the latest UK growth figures and Eurozone inflation reading.

At the time of writing, GBP/EUR was trading around €1.1522, marking a gain of roughly 0.2% on the session.

The Pound edged higher, even as the UK’s final fourth quarter growth figures confirmed a modest 0.1% expansion at the end of 2025.

Sterling drew some support from a slight upward revision to annual growth, which was lifted from 1.3% to 1.4%.

An uptick in supermarket price pressures also lent the currency some backing. UK food inflation climbed to 4.3% in the four weeks to 22 March, a development that may have bolstered expectations for further interest rate increases from the Bank of England.

The Euro found it difficult to gain traction, even as fresh data showed inflation across the Eurozone accelerated in March.

According to preliminary figures, headline inflation rose from 1.9% to 2.5%, moving back above the European Central Bank’s 2% target.

However, the increase fell short of market expectations, while core inflation edged lower from 2.4% to 2.3%.

As a result, investors trimmed some of their more aggressive bets on future rate hikes, leaving the single currency on the back foot.

Short-Term GBP/EUR Forecast: PMI Data to Guide Direction

Final manufacturing PMI readings from both the UK and the Eurozone will be in focus. If the data confirms stronger activity in the bloc alongside a slowdown in the UK, the Pound Euro exchange rate could face some downside pressure. However, unless there are notable revisions to the preliminary estimates, any movement may prove limited.

The Eurozone’s latest unemployment rate is also due, though it is unlikely to have a significant impact unless there is a surprise.

Developments in the Middle East may continue to drive broader market sentiment, potentially prompting volatility and influencing movement in the pairing.

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TAGS: Pound Euro Forecasts