Pound-to-Euro Forecast: PMIs and Politics Set to Drive Next Move

The Pound to Euro (GBP/EUR) exchange rate traded in a narrow range at the start of the week. Investors digested Prime Minister Keir Starmer's resignation and looked ahead to key PMI surveys on both sides of the Channel. At the time of writing, GBP/EUR was trading around €1.1543, little changed from Monday's opening.

Sterling barely moved. The euro barely moved. A half-point spread in either direction through Monday's session reflected a market waiting for data, not one positioned for a political jolt.

Starmer's exit removes a known political anchor. It does not shift the immediate rate path, traders said. Markets had already priced Labour's poll lead as a modest sterling tailwind. Removing the leader mid-campaign creates uncertainty about succession and platform continuity. The UK general election is still months away, and the currency impact is noise, not signal, one dealer said.

The next real catalyst arrives Wednesday with the UK services PMI for June. Economists polled by Reuters expect a reading near 53.0, consistent with modest expansion. A miss below 50 would mark contraction. That would likely push GBP/EUR toward the low end of the €1.15–€1.17 range held since late May. A beat above 54.0 would test the upper boundary. That is especially true if the eurozone services PMI, due Friday, comes in below the 52.5 consensus. Weak French data this month already dragged the composite eurozone reading toward stagnation.