GBP/EUR exchange rate week review: pound hits 4-week high versus euro following budget
24/11/2025 to 28/11/2025: The pound climbed to a four-week high against the euro as Chancellor Rachel Reeves’s autumn budget eased fiscal uncertainty. But with markets still digesting tax plans and eyeing a possible rate cut, the UK currency's gains remained fragile.
Monday
The pound euro (GBP/EUR) exchange rate stumbled to around 1.133 as anxiety ahead of the autumn budget undermined the UK currency. This was compounded by former Bank of England (BoE) Chief Economist Andy Haldane, who stated that budget uncertainty is “the single biggest reason why growth has flatlined” in the second half of 2025.
Renewed optimism over Ukraine-Russia peace talks boosted the single currency, helping it swerve an unexpected drop in German business morale in November.
Tuesday
The pound briefly edged above the 1.14 level against the euro following reports Chancellor Rachel Reeves would refrain from imposing additional taxes on banks in the upcoming budget.
The euro strengthened amid optimism over Russia-Ukraine negotiations, overcoming weak German data that showed the Eurozone economy stalled in the third quarter.
Wednesday
The pound touched a four-week high above 1.14 after Chancellor Rachel Reeves unveiled her much-anticipated budget. The announcement of a raft of tax rises that are set to raise £26.1bn by 2029-30 helped ease fiscal uncertainty. This, coupled with stronger 2025 growth projections, bolstered the UK currency.
The euro lost ground to the riskier pound amid an upbeat market mood. Ongoing uncertainty regarding the proposed Russia-Ukraine peace plan, coupled with fluctuating dollar movements – which is typically inversely correlated with the euro – also left the single currency lacking a clear direction.
Thursday
The pound wavered as traders continued to digest the autumn budget. Notably, concerns that Rachel Reeves’s tax increases will be deferred. Speculation regarding a possible BoE interest rate cut in December also moderated demand for the UK currency.
The euro edged up after European Central Bank (ECB) minutes showed unanimous support for steady interest rates, offsetting weak German consumer sentiment ahead of December.
Friday
The pound continued to drift amid a quiet UK data calendar, leaving it exposed to further scrutiny of the budget and its longer-term implications.
The euro benefitted from German CPI tailwinds after data for November showed inflation rose more than expected to 2.6% in the Eurozone’s largest economy.
The pound euro exchange rate ended the week around 1.1408.
Looking ahead
A lack of influential data from the UK economy means the pound’s fortunes will largely hinge on how markets continue to interpret the budget and what subsequent expectations arise for BoE policy.
The health of the eurozone economy will be in sharp focus for euro investors, notably fresh data on inflation and growth on Tuesday and Friday, respectively.
Contact a currency specialist to discover how they can help you take control of exchange rates.