Pound to Euro Held Back by Starmer Leadership Concerns

Modified: Wednesday, 13 May 2026 22:01 BST - Written by Ben Hughes

STORY LINK Pound to Euro Held Back by Starmer Leadership Concerns

The Pound Euro (GBP/EUR) exchange rate wobbled on Wednesday as markets remained wary of political uncertainty in the UK.

At the time of writing, GBP/EUR was trading at €1.1535, having wavered in a narrow range.

The Pound (GBP) traded without conviction on Wednesday as ongoing political uncertainty in the UK continued to weigh on Sterling sentiment.

Although Prime Minister Keir Starmer appeared to have seen off an immediate threat to his leadership, his authority still looked vulnerable.

Tuesday’s resignation of four ministers intensified speculation that Health Secretary Wes Streeting could mount a leadership challenge, although no such move emerged during the day.

Even so, rumours continued to circulate on Wednesday, particularly after Streeting made a brief visit to No 10 for a notably short meeting with Starmer.

With doubts over the Prime Minister’s position still unresolved, the Pound struggled to find support through Wednesday’s session.

The Euro (EUR) lost ground on Wednesday, pressured by its strong inverse relationship with the US Dollar (USD) as the American currency advanced.

The single currency also faced headwinds from a disappointing set of Eurozone data releases.

In Germany, wholesale prices rose by less than expected in April, coming in at 2% rather than the forecast 2.7%.

Meanwhile, Eurozone industrial production was subdued in March, printing at 0.2%, while February’s figure was revised lower from 0.4% to 0.2%.

Against this backdrop, the Euro struggled to attract support.

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

Looking ahead, GBP investors will turn their focus to the UK’s latest GDP growth figures on Thursday morning.

Markets expect the British economy to have expanded by 0.6% in the first quarter of 2026. A robust reading could help Sterling strengthen.

However, a weaker-than-forecast GDP print may leave the UK currency exposed to fresh selling pressure.

At the same time, lingering political uncertainty could continue to cap the Pound’s upside, with any further signs of instability likely to unsettle GBP investors.

For the Euro, attention may fall on a speech from European Central Bank (ECB) President Christine Lagarde. Any indication that the ECB is preparing to raise interest rates could offer the single currency some support.

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TAGS: Pound Euro Forecasts