GBP/EUR exchange rate week review: pound falls to near one-month low versus euro
30/03/2026 to 03/04/2026: The pound slid to a near one-month low against the euro, weighed down by sluggish UK GDP growth, persistent inflationary pressures, and ongoing Middle East tensions.
Monday
The pound euro (GBP/EUR) exchange rate drifted lower due to a lack of notable data, leaving the UK currency adrift. Instead, investors focused on the UK’s precarious economic position and concerns over how inflationary pressure could restrict growth.
The euro was muted. An increase in German inflation that stoked expectations of a European Central Bank (ECB) interest rate hike this month was offset by a fall in Eurozone economic sentiment in March.
Tuesday
The pound fell almost 0.5% to a near one-month low against the euro, as markets digested the latest UK GDP print, which showed the economy only posted marginal gains in the fourth quarter. The UK currency’s losses were capped after the annual growth rate was adjusted higher marginally from 1.3% to 1.4%.
The euro struggled to attract support, despite a jump in Eurozone inflation in March. Headline inflation leapt from 1.9% to 2.5%, pushing above the ECB’s 2% target. However, the rise wasn’t as sharp as forecast, and core inflation eased from 2.4% to 2.3%.
With the data falling short of expectations, some investors scaled back their most hawkish ECB rate hike bets, denting the euro slightly.
Wednesday
The pound edged higher against the euro after optimism over a potential de-escalation in the Middle East applied downward pressure to UK bond yields.
The euro softened, despite an upward revision to the bloc’s final manufacturing PMI for March, from 51.4 to 51.6.
Thursday
The pound softened a fraction against the safer euro as Middle East tensions kept market sentiment fragile.
US President Donald Trump signalled that military operations in the region will persist and offered no clear timeline for ending the conflict. This indicated sustained supply disruptions in the Strait of Hormuz, resulting in continued elevated oil prices.
Oil-driven inflation risks reinforced a tighter policy outlook for the ECB and the Bank of England (BoE).
Friday
The pound euro (GBP/EUR) exchange rate was subdued amid an empty economic calendar during the Easter bank holiday.
The pound euro exchange rate ended the week around 1.145.
Looking ahead
An absence of influential data from the UK economy will keep the impact of oil-driven inflationary pressures on BoE policy expectations in focus.
Eurozone retail sales figures and German inflation data hit the headlines on Wednesday and Friday, respectively.