EUR/GBP Holds Above 0.8600 as UK GDP Declines Again in May

EUR/GBP Holds Above 0.8600 as UK GDP Declines Again in May

Published: July 11, 2025
Category: Forex | Economic Data | Market Analysis

EUR/GBP Climbs Following Weak UK GDP Print

The EUR/GBP currency pair continues to hold firm above the 0.8600 level, trading around 0.8615 during the early European session on Friday. The pair is bolstered by weaker-than-expected UK economic data, which weighed on the British Pound (GBP).

UK Economic Growth Misses Expectations

The Office for National Statistics (ONS) reported that the UK Gross Domestic Product (GDP) contracted 0.1% month-on-month (MoM) in May 2025, compared to a revised -0.3% in April. Economists had anticipated a 0.1% growth, making the latest result a disappointment.

The contraction marks the second consecutive month of economic decline, increasing the likelihood that the Bank of England (BoE) will be pressured into cutting interest rates more aggressively.

BoE Policy Outlook in Focus

With growth faltering, market expectations are shifting toward the BoE adopting a more dovish stance, potentially weakening GBP further in the short term. The rate outlook is being closely watched, especially amid global trade uncertainty and geopolitical risks.

US-EU Tariff Developments Also Eyed

Aside from the UK data, market participants are monitoring the US-EU tariff negotiations, with new developments expected to shape EUR sentiment. US President Trump has hinted at new tariff announcements that could affect EU exports.

Key Takeaways:

• EUR/GBP trades at 0.8615, gaining as GBP slips
• UK GDP declined 0.1% MoM in May vs +0.1% expected
• Markets expect a more dovish BoE response
• US-EU tariff talks remain a risk factor for EUR pairs

Related Tredu Articles:

• UK GDP Falls Again: What It Means for BoE Policy
• Pound Sterling Under Pressure: EUR/GBP and GBP/USD Analysis
• US-EU Tariff Tensions Could Impact Euro Outlook