Pound-to-Euro Rate Holds €1.16 as ECB Rate Hike Fails to Lift EUR

Modified: Thursday, 10 September 2026 20:16 BST - Written by Frank Davies

STORY LINK Pound-to-Euro Rate Holds €1.16 as ECB Rate Hike Fails to Lift EUR

The Pound to Euro (GBP/EUR) exchange rate was largely unchanged on Thursday, with Sterling holding its ground despite the European Central Bank (ECB) delivering its latest interest rate hike.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1639, almost unchanged from Thursday’s opening levels.

The Euro (EUR) struggled to gain traction on Thursday after the European Central Bank concluded its September policy meeting.

As anticipated, the central bank raised interest rates by a further 25 basis points, taking its benchmark rate to 2.65% and marking its second hike of the year.

With the decision already fully reflected in market pricing, attention quickly shifted towards the ECB’s accompanying guidance.

The single currency subsequently drifted lower as the bank’s policy statement and comments from President Christine Lagarde failed to provide the hawkish signals some Euro investors had been anticipating.

The Pound (GBP) traded within a narrow range on Thursday, with a lack of significant UK economic data leaving Sterling without a strong domestic driver.

In the run-up to Friday’s GDP, industrial production and trade figures, GBP investors instead kept a close eye on developments in the UK bond market and the direction of inflation.

A period of greater stability in gilt markets offered some relief following the sharp volatility seen earlier in the week.

UK borrowing costs had risen dramatically, with the yield on 30-year gilts reaching 5.82% at Tuesday’s government debt auction, the highest level recorded since the Debt Management Office was established in 1998.

Near-Term GBP/EUR Forecast: UK GDP Data Could Put Sterling Under Pressure

Attention now turns to the UK's latest GDP figures, which are likely to provide the main catalyst for the Pound Euro exchange rate as the week draws to a close.

The latest monthly figures are expected to show that UK economic growth stalled in July, following a 0.3% expansion during June.

Confirmation of stagnant growth could weigh on Sterling, particularly if the figures raise fresh concerns over the Bank of England’s (BoE) ability to balance its efforts to contain inflation with the need to support economic activity.

For the Euro, meanwhile, Christine Lagarde is due to speak again on Friday.

A more hawkish message than that delivered during Thursday’s ECB press conference could give the single currency a boost.

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TAGS: Pound Euro Forecasts