GBP/EUR Forecast: Pound Price Unmoved by UK and Eurozone Services PMI

June 4, 2025 - Written by Ben Hughes

STORY LINK GBP/EUR Forecast: Pound Price Unmoved by UK and Eurozone Services PMI

The Pound Euro exchange rate (GBP/EUR) traded in a narrow range on Wednesday as the UK and Eurozone released their respective services PMIs.

At the time of writing, the GBP/EUR was trading at around €1.1879, virtually unchanged from Wednesday’s opening levels.

The Pound (GBP) held its ground against most major peers on Wednesday following the release of the UK’s finalised services PMI for May.

The index was revised up from 49 to 50.9, comfortably beating expectations of a more modest rise to 50.2, and marking a return to growth in the UK’s dominant services sector.

While the upbeat figures didn’t spark a notable rally in Sterling, they appeared to reassure investors about the UK’s economic outlook, helping to keep the Pound broadly supported through mid-week trade.

The Euro (EUR) struggled to attract support on Wednesday after the Eurozone’s finalised services PMI for May revealed a slight downturn in activity.

The index slipped from 50.1 to 49.7, marking a return to contraction territory.


Despite this, the reading still came in higher than forecasts of 48.9, which helped limit losses for the single currency.

As a result, EUR exchange rates remained largely stable through the European session, though underlying concerns about economic momentum in the bloc capped demand.

Looking to Thursday, the spotlight will fall on the European Central Bank’s (ECB) latest interest rate decision, a key event likely to drive movement in the Pound Euro (GBP/EUR) exchange rate.

Markets broadly expect the ECB to announce a 25 basis-point rate cut, which could initially exert pressure on the Euro.

However, the impact on EUR may be more pronounced if the ECB strikes a dovish tone regarding the path for future rate reductions.

This comes in the wake of the bloc’s softer-than-expected inflation print earlier in the week, which saw headline CPI fall to 1.9%, slipping below the ECB’s 2% target.

As such, any suggestion of further loosening could weigh heavily on the single currency.


Meanwhile, the Pound may struggle for direction on Thursday in the absence of any notable UK economic releases, potentially leaving Sterling to move in response to external factors and broader market sentiment.

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TAGS: Pound Euro Forecasts