- Pound (GBP) is rising after losses last week
- This is a busy week for data with CPI, retail sales & PMIs
- Euro (EUR) falls despite an upward revision to growth
- Although the EU Commission lowered GDP forecasts for 2026
The Pound-Euro (GBP/EUR) exchange rate is rising after losses last week. The pair fell 0.25% in the previous week, settling on Friday at €1.1335. It traded between €1.1277 and €1.1407. At 14:00 UTC, GBP/EUR trades 0.25% at €1.1364.
The pound is pushing higher, recovering from losses last week, which marked the fourth straight weekly decline for sterling.
The pound is stabilising after last week’s large swings following weak data and nerves ahead of Chancellor Rachel Reeves’ budget at the end of this month.
Last week, data showed the unemployment in the UK rose to its highest level since the pandemic. Data also revealed that Q3 GDP was weaker than expected. These data points boosted expectations that the Bank of England will cut interest rates by 25 basis points at the December meeting.
The pound fell even further on Friday on reports that Chancellor Rachel Reeves would not increase income tax in the budget. This alarmed investors who had been expecting an increase to help fill an unexpectedly large fiscal shortfall.
The UK economic calendar is quiet today. Attention will turn to inflation data on Wednesday, and retail sales figures later in the week.
The euro is falling against the pound and the US dollar, despite the European Commission upwardly revising its economic growth forecasts. The EU Commission report showed that growth had exceeded expectations in the first nine months of the year. This was initially due to a surge in exports ahead of US tariff increases, for investment in equipment and intangible assets also performed better than expected.
The EU Commission released a revised growth forecast this year of 1.3% from 0.9%; however, it also cut 2026 growth to 1.2% from 1.4%.
Looking ahead, the eurozone economic calendar is relatively quiet, with attention turning to PMI figures on Friday.