GBP/EUR exchange rate week review: pound falls following downbeat jobs and GDP data from UK economy
09/06/2025 to 13/06/2025: The pound fell by more than 1% against the euro following the release of downbeat economic data from the UK economy.
Monday
The pound euro (GBP/EUR) exchange rate traversed the 1.18 range amid a lack of influential economic data from the UK economy.
The euro was shackled by its negative correlation with a stronger dollar. This limited the impact of growing hopes that Germany is poised to announce a fresh round of fiscal stimulus as part of its upcoming budget.
Tuesday
The pound slumped to around 1.181 after a lacklustre UK jobs report stoked Bank of England (BoE) interest rate cut speculation.
The unemployment rate rose from 4.5% to 4.6% in April – its highest level since August 2021 – and wage growth eased from 5.5% to 5.2%, below forecasts for 5.4%.
The euro was buoyed by a decline in the value of the dollar and a sharp improvement in the Eurozone investor confidence in June. In addition, comments from European Central Bank (ECB) policymakers reinforced its recent hawkish shift in tone.
Wednesday
The pound drifted below the 1.18 level versus the euro as investors digested the UK government’s latest spending review, which got a largely muted response.
The euro was supported by its negative correlation with the dollar and hopes that EU-US trade talks will be a priority for the Trump administration after it signed a new agreement with China.
Thursday
The pound euro exchange rate bounced off the 1.17 level following downbeat GDP data showing the UK economy contracted 0.3% in April – its worst monthly contraction since 2023.
This was compounded by euro strength, which continued to benefit from its negative correlation with a plunging dollar. Further tailwinds were generated by hawkish comments from European Central Bank (ECB) officials.
ECB policymaker Isabel Schnabel stated that monetary policy is currently well-positioned, noting that price growth is expected to accelerate again over the medium term. President Christine Lagarde echoed these remarks.
Friday
Equity market volatility spiked on Friday, causing the pound euro rate to dip. Investors protected against losses in global equity markets amid fears of a major conflict in the Middle East following the Israeli and Iranian attacks.
The pair recovered into the 1.17 mid-range after the single currency was dented by the latest German CPI, which showed inflation in the Eurozone’s largest economy eased to 2.1% in May. The print reinforced expectations of further interest rate cuts from the ECB.
Looking ahead
PMI figures for the UK, Germany and the wider bloc will be closely monitored by investors on Monday.
UK GDP figures for the first quarter hit the headlines on Friday. Investors in the pound will be looking for confirmation that the UK economy defied gloomy warnings to grow 0.7% in Q1.