Pound to Euro Rate Steady as Markets Digest Starmer Resignation

Modified: Monday, 22 June 2026 20:01 BST - Written by Frank Davies

STORY LINK Pound to Euro Rate Steady as Markets Digest Starmer Resignation

The Pound to Euro (GBP/EUR) exchange rate moved within a tight band on Monday, with traders largely unmoved by UK political developments following Prime Minister Keir Starmer’s resignation announcement.

At the time of writing, GBP/EUR was changing hands near €1.1538, showing little deviation from the opening levels of the session.

Sterling traded without a clear direction at the start of the week after Keir Starmer confirmed his resignation timetable and outlined the next steps in his departure from office.

Market reaction was relatively muted, with investors having already positioned for the announcement amid widespread speculation over the weekend.

Attention has increasingly turned to Andy Burnham, who is widely seen as the frontrunner to succeed Starmer following his recent by-election momentum.

While earlier comments on fiscal policy from Burnham unsettled bond markets last year, his more recent tone has been noticeably steadier, helping to keep UK gilt yields broadly unchanged at the start of the week.

Even so, some caution remains in the background, with investors alert to the possibility of a renewed political risk premium for Sterling depending on Cabinet appointments, particularly the identity of the next Chancellor.

The Euro was similarly stable on Monday, with traders reluctant to take strong positions ahead of comments from Christine Lagarde, who is due to speak later in the day on behalf of the European Central Bank.

Markets appear to be in wait-and-see mode, with investors hoping for further clarity on the ECB’s policy stance and inflation outlook.

Should Lagarde strike a more cautious tone on inflation persistence despite easing global geopolitical tensions, it could reinforce expectations of tighter policy for longer and offer support to the single currency.

Near-Term GBP/EUR Forecast: PMI Releases in Focus

Looking ahead to Tuesday, direction in GBP/EUR is likely to be influenced by both UK political uncertainty and the latest flash PMI data from the UK and Eurozone.

In the UK, June’s figures are expected to show that the services sector narrowly avoided contraction, although overall growth momentum is forecast to remain weak, potentially limiting support for Sterling.

In contrast, Eurozone data is expected to indicate a third consecutive month of private sector contraction, which could weigh on the Euro if the figures undershoot expectations and reinforce concerns about regional economic headwinds facing the bloc.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts