Pound to Euro Rate Slips as ECB Rate Hike Bets Build

Modified: Wednesday, 26 August 2026 20:01 BST - Written by Frank Davies

STORY LINK Pound to Euro Rate Slips as ECB Rate Hike Bets Build

The Pound Euro (GBP/EUR) exchange rate edged lower on Wednesday as growing expectations of a European Central Bank (ECB) interest rate hike in September supported the single currency.

At the time of writing, GBP/EUR was trading at €1.1677, down marginally on the day.

The Euro (EUR) advanced on Wednesday as expectations of another European Central Bank rate hike helped to lift the single currency.

EUR investors welcomed comments from influential ECB policymaker Isabel Schnabel, who told Bloomberg News that interest rates need to rise further given the ongoing US-Iran war and the upside inflation risks created by the Eurozone’s resilient economy.

Her remarks strengthened expectations that the ECB could tighten monetary policy again next month, providing the Euro with fresh support.

Meanwhile, the Pound (GBP) remained subdued on Wednesday as concerns over the rising cost of living in the UK limited support for Sterling.

News that the energy price cap will rise again in October prompted fresh concerns over the potential impact of the squeeze on household incomes on the British economy.

The prospect of further government support for struggling households also raised questions over how any such measures would be funded.

Near-Term GBP/EUR Forecast: ECB Minutes to Lift the Euro?

Thursday’s session begins with the release of Germany’s latest consumer confidence index. Another pessimistic reading in September could place some pressure on the Euro.

The focus will then shift to the minutes from the European Central Bank’s latest monetary policy meeting. A hawkish tone from policymakers last month could offer further support to the single currency.

Meanwhile, there is little in the way of market-moving UK data on Thursday, which may result in limited movement for the Pound.

GBP investors may instead focus on domestic developments, with political headlines and continued concerns over the rising cost of living potentially influencing Sterling.

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TAGS: Pound Euro Forecasts