The pound euro (GBP/EUR) exchange rate is rising for a second day.
The pound is gaining against the euro but weakening versus the US dollar as escalating Middle East tensions lift oil prices, reignite inflation concerns, and curb rate-cut expectations.
Investors are also assessing the UK’s outlook after the OBR cut 2026 growth to 1.1% and sees unemployment peaking at 5.3%. Inflation is forecast to hit 2% later this year, though these forecasts were made before the Middle East conflict.
The euro is under pressure amid the region’s dependence on imported energy, amid skyrocketing prices.
Eurozone inflation rises to 1.9% YoY from 1.7% and could rise further should oil prices remain elevated.