- Pound (GBP) is rising but fell across the week
- Unemployment and inflation data are due next week
- Euro (EUR) falls despite in-line GDP growth
- Eurozone Q4 GDP grew at 0.3% QoQ
The Pound-Euro (GBP/EUR) exchange rate rose on Friday after small losses yesterday. The pair fell 0.03% in the previous session, settling on Thursday at €1.1477. It traded between €1.1467 and €1.1504. At 21:30 UTC on Friday, GBP/EUR settled +0.24% higher at €1.1504. The pair fell -0.13% across the week.
The pound rose on Friday after small losses yesterday and is on track to end the week lower, a week whn the UK economy barely grew in the final quarter of the year and a week in which Prime Minister Keir Starmer will be pleased to see the end of.
At the start of the week, PM Keir Starmer faced a leadership challenge amid calls for his resignation over his handling of the appointment of Peter Mandelson as the US ambassador. While he had weathered that challenge, he faced backlash at the end of the week after forcing out cabinet secretary Chris Warmwood after just 14 months in the role.
Looking ahead, attention will be on a busy UK economic calendar next week, which could provide further clues about the likelihood of a March Bank of England rate reduction. UK employment data and CPI figures will be in focus.
The euro is under pressure despite data showing that the economy grew 0.3% in the final quarter of 2025, matching the preliminary reading. This followed 0.3% quarter-on-quarter growth in Q3.
Lithuania posted the strongest quarterly growth with GDP rising 1.7% full and by the Greek Cypriot administration at 1.4% in Poland, with 1%. Meanwhile, Romania and Ireland posted contractions.
The labour market also showed momentum, with Employment Change holding at 0.2% quarter-on-quarter in Q4, above the 0.1% forecast. Annual employment growth was 0.6%, in line with expectations.
The data comes as the ECB considers monetary policy to be in a good place with inflation “basically on target”.
