Pound to Euro Tumbles as Burnham Speculation Hits Sterling

Modified: Thursday, 14 May 2026 20:36 BST - Written by David Woodsmith

STORY LINK Pound to Euro Tumbles as Burnham Speculation Hits Sterling

The Pound to Euro (GBP/EUR) exchange rate moved within a tight range on Thursday, with Sterling sentiment continuing to be shaped by developments in UK politics and renewed speculation surrounding Andy Burnham’s return to Westminster.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1483, down roughly 0.5% on the day.

The Pound (GBP) traded without clear momentum on Thursday as investors focused on mounting political uncertainty in Westminster rather than encouraging UK economic data.

Figures released by the Office for National Statistics showed the UK economy expanded by 0.6% in the first quarter, while March GDP unexpectedly rose by 0.3% on a monthly basis.

The stronger-than-forecast data pointed to a degree of resilience in the UK economy despite the disruption caused by the conflict in the Middle East and helped reinforce expectations that the Bank of England (BoE) may still need to consider tighter monetary policy later in the year.

However, Sterling failed to gain much traction as traders remained concerned about growing tensions within Labour, amid speculation that Andy Burnham could seek a return to Parliament and eventually challenge Prime Minister Keir Starmer’s leadership.

The Euro (EUR) was largely directionless on Thursday as the absence of major Eurozone data releases left investors with little fresh impetus.

Without any significant economic indicators from the bloc, movement in the single currency was mostly tied to wider market sentiment and geopolitical developments.

Investor caution persisted as markets continued to monitor the situation in the Middle East, alongside the ongoing meeting between US President Donald Trump and Chinese President Xi Jinping and its potential implications for regional stability.

Near-Term GBP/EUR Forecast: Political Uncertainty to Continue Pressuring Sterling?

Looking ahead, political developments in the UK are expected to remain the main driver for the Pound to Euro exchange rate through the end of the week.

Speculation over a possible challenge to Starmer’s leadership may continue to weigh on Sterling sentiment, with the currency vulnerable to sharper losses if tensions within Labour escalate further or if Andy Burnham’s parliamentary ambitions gain momentum.

In contrast, with the Eurozone calendar remaining relatively quiet, the Euro is likely to take its cues from broader market trends and shifts in global risk appetite.

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TAGS: Pound Euro Forecasts