British Pound to Euro Forecast: GBP Flat after Weak UK and German Data

Modified: Tuesday, 4 August 2026 12:11 BST - Written by David Woodsmith

STORY LINK British Pound to Euro Forecast: GBP Flat after Weak UK and German Data

The Pound Euro (GBP/EUR) exchange rate moved sideways on Monday as subdued economic data from both the UK and Eurozone left the pairing lacking a clear direction.

At the time of writing, GBP/EUR was trading at €1.1674, broadly unchanged compared with the opening levels for the session.

The Pound (GBP) traded in a narrow range on Monday as the latest UK economic figures failed to provide fresh direction.

The final manufacturing PMI showed the sector slowed from 52.5 in June to 51.9 in July, marking a downward revision from the preliminary reading of 52.8.

The weaker print pointed to a decline in business confidence as renewed escalation in the US-Iran conflict unsettled firms.

Despite this, the report also offered reasons for optimism. UK manufacturing has now remained in expansion territory for nine straight months following a prolonged contraction in 2025, with output, new orders and export demand all continuing to strengthen.

The Euro (EUR) traded without much direction on Monday after Germany released weaker-than-expected retail sales figures.

Retail sales in the Eurozone’s largest economy fell by 1.1% in June, a much steeper decline than the 0.5% drop markets had anticipated.

At the same time, the Eurozone’s final manufacturing PMI was revised lower, although the survey still indicated that factory activity across the bloc gathered pace in July.

Near-Term GBP/EUR Forecast: Quiet Trading Ahead?

Looking ahead, a quiet economic calendar on Tuesday could see the Pound to Euro exchange rate remain relatively subdued.

External developments may still shape the pairing, however. The Euro could take direction from its strong negative correlation with the US Dollar (USD), with the single currency potentially benefiting if weaker US factory orders place pressure on the ‘Greenback’.

Meanwhile, developments in the Middle East could also impact GBP/EUR. Any changes in broader risk appetite or movements in energy prices could trigger increased volatility for the pairing.

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TAGS: Pound Euro Forecasts