Sterling hits 17-month high against euro
EWU•Sterling rose to its strongest level against the euro since May 2025, reaching 83.95 pence per euro before trading at 84.11 pence. French unrest and higher energy prices weighed on the euro, while UK economic data and confidence in the government’s fiscal trajectory supported the pound.
1. Pound gains against euro
Sterling hit a 17-month high against the euro on Monday as unrest in France and rising energy prices weighed on the single currency. The pound was up 0.25% at 84.11 pence per euro after reaching 83.95 pence, its strongest level since May 2025. It fell 0.05% against the dollar to $1.3327.
2. UK outlook remains mixed
Views on the Bank of England’s rate path were mixed after data showed the UK economy grew more strongly than expected in August. HSBC said sterling could move lower, citing a hawkish Federal Reserve, a vulnerable UK economy and a reluctant Bank of England. The October 28 budget could add downside risks, HSBC said, while confidence in the government’s fiscal discipline has supported the pound.
