GBP/EUR exchange rate week review: pound hits 3-week high versus euro
06/10/2025 to 10/10/2025: The pound climbed to a three-week high against the euro, briefly surpassing the 1.15 mark as political turmoil in France weighed on the single currency. However, renewed concerns over the UK’s fiscal outlook and risk sentiment saw the pound give up some gains.
Monday
The pound euro (GBP/EUR) exchange rate jumped 0.5%, breaking through the 1.15 benchmark.
Political turmoil in France spooked investors in the single currency after the country’s new prime minister, Sebastien Lecornu, and his cabinet resigned just hours after being announced. This was compounded by the National Rally – the largest party in the French parliament – which refused to be involved in discussions aimed at resolving the crisis.
The euro faced further headwinds after data showed retail sales in the Eurozone stagnated, having increased by just 0.1% in August compared to July.
Tuesday
The pound slipped below the 1.15 level against the euro after elevated UK government bond yields caused concerns over the country’s fiscal sustainability to resurface.
The increasingly risk-sensitive pound was also undermined by the prevailing risk-off sentiment throughout global markets.
The euro was muted amid ongoing French political instability.
Wednesday
The pound rose to a three-week high in the 1.15 mid-range versus the euro after data showed German industrial production plunged 4.3% in August – a much steeper drop than the 1% contraction economists had forecast.
An absence of significant UK economic figures left the pound exposed to shifts in risk sentiment, allowing it to strengthen further against the safer euro as optimism improved.
Thursday
The pound euro rate dropped below the 1.15 benchmark amid ongoing concerns over the UK’s fiscal outlook ahead of the government’s autumn budget.
The single currency was pressured by German trade figures for August, which showed exports from Europe’s largest economy decreased for the second consecutive month, helping the pound to retrace its losses.
This overshadowed reports suggesting the appointment of a new French prime minister could be imminent, preventing fresh elections.
Friday
A light domestic data calendar left the pound trading without a clear direction against the euro.
The single currency found some support after French President Emmanuel Macron asked Sébastien Lecornu to return as prime minister just four days after he stood down from the post.
The pound euro exchange rate ended the week at around 1.149.
Looking ahead
UK unemployment figures are scheduled for release on Tuesday, with the rate expected to hold steady at 4.7% in three months to September, an outcome that would lend the pound little support.
Political developments in France could continue to influence the euro’s performance.
Contact a currency specialist to discover how they can help you manage your exposure to exchange rates.