Pound to Euro Rate Flat as Markets Await UK Election

Modified: Tuesday, 5 May 2026 22:31 BST - Written by David Woodsmith

STORY LINK Pound to Euro Rate Flat as Markets Await UK Election

The Pound Euro (GBP/EUR) exchange rate moved sideways on Tuesday, as a sparse economic calendar and the approach of the UK’s local elections kept investors on the sidelines.

At the time of writing, GBP/EUR was trading at around €1.1580, leaving the pairing virtually unchanged from the start of the session.

The Pound (GBP) struggled to find a clear direction on Tuesday, with market activity remaining subdued as traders returned from the Easter Bank Holiday weekend.

A sparse UK data calendar left Sterling without a strong domestic catalyst, while political uncertainty also kept investors cautious ahead of the upcoming local elections.

The vote is widely seen as an important test for Prime Minister Keir Starmer, with a poor showing for Labour potentially intensifying pressure on his leadership. UK borrowing costs had already begun edging higher on Tuesday, reflecting concerns that a difficult result could further unsettle the political backdrop.

The Euro (EUR) also traded in a narrow range on Tuesday, with a lack of notable Eurozone data leaving the single currency short of fresh direction.

Other major influences on EUR exchange rates were limited as well. In particular, the Euro’s usual negative correlation with the US Dollar (USD) offered little momentum, as the American currency moved sideways through the session.

Near-Term GBP/EUR Forecast: Could PMIs Lift the Pound?

Looking ahead, Wednesday’s final services PMIs from the UK and Eurozone could offer the GBP/EUR exchange rate some direction.

The Pound may find support if the UK’s services sector is confirmed to have gathered pace in April, while the Euro could struggle if the Eurozone reading points to a contraction in activity.

However, any revisions to the preliminary PMI releases may prompt sharper movement in the pairing.

EUR investors may also monitor remarks from European Central Bank (ECB) policymakers Philip Lane and Piero Cipollone. Any suggestion that officials could back an interest rate hike at the ECB’s next policy meeting may lend support to the single currency.

At the same time, Sterling sentiment could remain cautious ahead of Thursday’s UK local elections. Should UK borrowing costs continue to rise before voters head to the polls, the Pound may face renewed pressure.

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TAGS: Pound Euro Forecasts