Best Pound to Euro Rate as ECB Dovish Tone Weighs on EUR

Modified: Thursday, 30 April 2026 16:26 BST - Written by Ben Hughes

STORY LINK Best Pound to Euro Rate as ECB Dovish Tone Weighs on EUR

The Pound to Euro (GBP/EUR) exchange rate moved slightly higher on Thursday as markets reacted to fresh policy signals from both the European Central Bank (ECB) and Bank of England (BoE).

At the time of writing, the pairing was trading near €1.1570, reflecting a modest uptick from the opening levels.

The Euro (EUR) came under early pressure following the publication of the Eurozone’s latest GDP figures, which pointed to softer-than-expected economic expansion.

Preliminary data indicated growth slowed to 0.1% in the first quarter of 2026, missing expectations that it would hold steady. While part of the slowdown has been attributed to disruption from Middle East tensions, it also exposed broader fragilities within the bloc’s economy.

Selling pressure on the single currency intensified later in the session after the European Central Bank opted to leave interest rates unchanged while signalling a more cautious outlook. Policymakers avoided committing to further tightening, citing elevated uncertainty and downside risks to growth.

Sterling struggled to find a clear direction on Thursday as investors weighed the Bank of England’s latest policy decision.

The BoE kept rates unchanged, as widely anticipated, with only one member voting in favour of an immediate hike. Officials suggested that, provided the current surge in energy prices proves temporary, they would prefer not to risk undermining economic momentum with premature tightening.

This balanced stance kept the Pound largely contained, as markets saw little impetus for a significant shift in monetary policy expectations.

Near-Term GBP/EUR Forecast: Energy Market Developments to Drive Volatility

Looking ahead, fluctuations in energy markets are likely to remain a key driver for the Pound to Euro exchange rate.

The Eurozone may be particularly exposed to rising costs as it seeks alternative supply routes to replace energy imports previously sourced from the Gulf region. Meanwhile, in the UK, higher energy prices could feed into inflation expectations and place renewed upward pressure on government borrowing costs.

Investors may also turn their attention to remarks from BoE Chief Economist Huw Pill, which could offer additional insight into the central bank’s thinking following its latest decision, particularly after his lone vote in favour of tightening policy.

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TAGS: Pound Euro Forecasts