Pound to Euro Rate Rises as Healey Unveils UK Growth Push

Modified: Monday, 7 September 2026 20:31 BST - Written by Frank Davies

STORY LINK Pound to Euro Rate Rises as Healey Unveils UK Growth Push

The Pound to Euro (GBP/EUR) exchange rate started the week on a firmer footing, with Sterling finding some support as markets assessed Chancellor John Healey's first major speech since taking office.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1647, up modestly compared with Monday's opening levels.

The Pound (GBP) strengthened slightly on Monday after Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK.

Among the proposals, city regions will be given greater powers to shape local industrial strategies and attract private capital. Healey also committed to reducing the regulatory costs faced by businesses by 25% by the 2029 election.

The Chancellor additionally announced a £150 million investment fund targeting fast-growing companies in northern England. The British Business Bank will provide individual investments ranging from £5 million to £15 million.

Healey struck an upbeat tone as he argued that giving regions more control over investment and making it easier for businesses to expand could help the UK tackle its current economic difficulties.

The government's focus on growth appeared to offer some encouragement to GBP investors.

The Euro (EUR) was able to attract some support at the beginning of the week after an upward revision to Eurozone GDP revealed that the bloc's economy performed more strongly than initially reported during the second quarter.

According to the latest figures, Eurozone GDP expanded by 0.6% between April and June, an improvement on the preliminary estimate of 0.4%.

However, the single currency struggled to build on these gains as disappointing data from Germany highlighted continued weakness within the bloc's manufacturing sector.

German industrial production dropped by 1.1% month on month in July, sharply missing expectations for a 0.1% increase.

The unexpectedly steep decline raised fresh questions over whether the recent improvement in Germany's industrial sector can be sustained.

Near-Term GBP/EUR Forecast: ECB Decision Set to Take Centre Stage

With few major UK data releases due in the coming days, attention is likely to turn towards the European Central Bank's (ECB) latest interest rate decision, which could provide the next significant catalyst for the Pound Euro exchange rate.

A 25-basis-point interest rate hike has already been largely priced into markets, meaning investors will be paying close attention to the ECB's policy statement and any guidance offered by President Christine Lagarde.

Should Lagarde emphasise the need for further action to bring inflation under control, expectations of additional tightening could provide a boost to the Euro.

Conversely, continued geopolitical uncertainty could encourage the ECB President to adopt a more measured stance. Any suggestion that the central bank may be nearing the end of its tightening cycle could weigh heavily on the single currency.

For Sterling, meanwhile, the lack of significant UK economic data until later in the week could leave the Pound largely reliant on broader market sentiment and developments elsewhere.

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TAGS: Pound Euro Forecasts