British Pound-to-Euro Forecast: Burnham's Market-Friendly Message Supports GBP

Modified: Tuesday, 30 June 2026 15:06 BST - Written by Frank Davies

STORY LINK British Pound-to-Euro Forecast: Burnham's Market-Friendly Message Supports GBP

The Pound to Euro exchange rate (GBP/EUR) has remained close to the 1.1600 level as investors continued to welcome Andy Burnham's commitment to fiscal discipline and an orderly transition of power. Sterling has held onto recent gains despite lingering political uncertainty, with markets increasingly confident that any new government will seek to preserve credibility with bond investors.

GBP/EUR Forecasts: Close to 1.16

The Pound to Euro (GBP/EUR) exchange rate has maintained a firm tone and is trading close to 1.1600 without being able to make a decisive break above this level.

Monday’s speech from Andy Burnham did not scare markets and helped underpin the Pound in global markets with Sterling securing a limited net advance following his comments.

CFTC data recorded a further increase in short, speculative Pound positions with the overall short position at the highest for over 10 years, increasing the possibility of short covering if Pound losses do not materialise.

ING noted the Pound’s resilience, but still expects GBP/EUR will retreat towards 1.15 over the next few weeks.

There are no major UK data releases this week with politics and central bank talk likely to dominate.

UK political developments will remain important with increasing evidence that Andy Burnham will win the Labour leadership without a contest.

MUFG put recent developments in context; “So far market participants have not been unnerved by potential policy changes under his leadership. The 30-year gilt yield has fallen by around 40bps from last month’s high at 5.86% driven mainly by the paring back of inflation expectations and BoE rate hike expectations.

It added; “Andy Burnham's pledge to stick to the government’s current fiscal rules curtailing room to loosen fiscal polices have also played a role.”

In his speech on Monday Burnham promised devolution and re-industrialisation with a much greater focus on the North.

On the economy he stated that policy would be based on sound finances and the discipline of fiscal rules. These comments continued to offer short-term market reassurance, lessening the risk of any Pound sell-off.

The issue of who will be Chancellor in a Burnham administration remains a key issue.

ING commented; “In recent days, however, Energy Secretary Ed Miliband has emerged as a frontrunner for that role, yet the pound has held on to its gains. This suggests either that markets had been pricing a smoother transition via a Burnham ‘coronation’ rather than Streeting becoming Chancellor last week, or that they do not see material risks of fiscal slippage under Miliband.”

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TAGS: Pound Euro Forecasts