GBP/EUR exchange rate week review: pound falls to two-week low versus euro
The pound slipped against the euro as political turmoil surrounding Prime Minister Keir Starmer's leadership overshadowed modest UK economic data. Meanwhile, the euro found support from improving Eurozone investor confidence and solid GDP figures.
Monday
The pound euro (GBP/EUR) exchange rate struck a fresh two-week low amid mounting pressure on Kier Starmer that intensified political uncertainty. The pair fell into the 1.14 mid-range after investors in the UK currency were spooked by fresh doubts surrounding the Prime Minister’s leadership and control of the Labour Party following the resignation of two senior aides.
The single currency was bolstered by its inverse correlation to a weakening dollar and data showing investor confidence in the Eurozone increased to a seven-month high in February.
Tuesday
Persistent headwinds created by UK political instability continued to restrict pound sentiment, with reports suggesting infighting within the Labour Party is far from resolved.
The single currency traded in a narrow range as a lack of fresh Eurozone data left it subdued.
Wednesday
The pound edged above the 1.15 level, demonstrating resilience despite ongoing UK political uncertainty and an absence of fresh economic data.
Renewed Russia-related tensions weighed on the single currency. Additional pressure was created by its strong inverse relationship with a strengthening dollar.
Thursday
The pound achieved brief gains after UK GDP figures for the fourth quarter of 2025 came in below expectations. Economic growth remained at 0.1%, missing forecasts for a pickup to 0.2% and supporting speculation that the Bank of England (BoE) could cut interest rates in the near term.
The euro was muted due to an ongoing lack of Eurozone data and continued uncertainty over progress toward peace in Ukraine, amid concerns that upcoming negotiations may stall over territorial issues.
Friday
With UK data scarce, the pound continued to trade without a clear direction. Meanwhile, the euro was supported by encouraging Eurozone GDP numbers for the final three months of 2025.
The Eurozone economy grew in the fourth quarter by 0.3%, in line with forecasts. Compared to the same quarter of the previous year, GDP in the bloc rose by 1.3%.
The pound euro exchange rate ended the week around 1.149.
Looking ahead
A flurry of influential data releases from the UK economy hit the headlines in the coming days. Wednesday’s consumer price index will attract most attention from pound investors. Inflation is forecast to resume its descent to the BoE’s 2% target, potentially undermining the pound if rate cut speculation ramps up.
Contact a currency specialist to discover how they can help you take control of exchange rates.