Pound-to-Euro Rate Supported Despite Soft UK Wage Data

April 15, 2025 - Written by Tim Boyer

STORY LINK Pound-to-Euro Rate Supported Despite Soft UK Wage Data

The Pound to Euro rate climbed on Tuesday, but a mixed UK employment report curtailed upward momentum.

Figures from the Office for National Statistics (ONS) showed that unemployment remained steady at 4.4% in February, but average wage growth slowed to 5.6%, falling short of expectations.

This slowdown in pay pressures reignited speculation the Bank of England (BoE) could cut interest rates again in May, limiting appetite for the Pound.

However, Sterling sentiment remained buoyed by hopes of progress in UK-US trade talks, following upbeat comments from US Vice-President JD Vance about the potential for a bilateral agreement.

The Euro (EUR) struggled to find support on Tuesday as it was rocked by a sharp deterioration in German economic sentiment.

The latest ZEW index revealed that investor morale in the Eurozone’s largest economy slumped from 51.6 to -14 in April, far below forecasts.

This dramatic fall in confidence was largely attributed to renewed US-EU trade tensions, with German business leaders growing increasingly concerned about the global economic outlook.


Looking ahead, the Pound Euro exchange rate could face fresh headwinds on Wednesday with the release of the UK’s latest inflation figures.

Headline CPI is expected to show a further easing of inflationary pressures in March. This may add weight to bets for a May BoE rate cut, dragging on Sterling.

Meanwhile, the Euro may remain rangebound ahead of Thursday’s European Central Bank (ECB) rate decision, as investors brace for an expected interest rate cut and await further guidance on the bank’s monetary policy path in a post-tariff world.

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TAGS: Pound Euro Forecasts