Pound to Euro Falls after BoE Holds Rates in 6-3 Vote

Modified: Thursday, 17 September 2026 23:16 BST - Written by John Cameron

STORY LINK Pound to Euro Falls after BoE Holds Rates in 6-3 Vote

The Pound to Euro (GBP/EUR) exchange rate struggled for momentum on Thursday as investors reacted to the Bank of England’s (BoE) latest interest rate decision.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1654, down modestly from Thursday’s opening levels.

Sterling (GBP) came under some pressure against its major counterparts on Thursday following the conclusion of the BoE’s September policy meeting.

As anticipated, policymakers voted to leave interest rates unchanged, with the decision passing by a 6-3 majority despite renewed concerns surrounding inflation.

The voting split and cautious language in the accompanying statement prompted some disappointment among GBP investors, who had been pricing in a considerable degree of additional monetary tightening before the end of 2026.

Sterling did receive some support from the BoE’s decision to reduce the pace of its quantitative tightening programme, however.

The announcement triggered a sharp drop in UK gilt yields, helping to ease some of the pressure weighing on the Pound.

The Euro (EUR) remained subdued on Thursday as the single currency continued to feel the effects of the US Dollar’s (USD) sharp rally earlier in the week.

The ‘Greenback’ surged on Wednesday after the Federal Reserve delivered the widely anticipated 25-basis-point interest rate hike, while also signalling that further tightening could be required before the end of the year.

Meanwhile, the Euro faced an additional headwind following the release of revised Eurozone inflation figures for August.

The final data showed that annual price growth was slightly weaker than previously estimated, potentially reducing pressure on the European Central Bank (ECB) to pursue further tightening.

Near-Term GBP/EUR Forecast: UK Retail Sales in Focus

As the week draws to a close, the Pound Euro exchange rate could come under renewed pressure when the UK's latest retail sales figures are released.

Consumer spending is expected to have contracted for a second consecutive month in August.

If confirmed, the figures could fuel concerns about the strength of household demand and the resilience of the UK’s important services sector.

For the Euro, meanwhile, attention will turn to comments from European Central Bank (ECB) President Christine Lagarde on Friday.

A more hawkish tone from Lagarde could provide the single currency with some additional support.

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TAGS: Pound Euro Forecasts