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Sterling Hits Nine-Month High: Time to Move Your Pounds?

ended 12. March 2026

The Pound has gained over 1% in value against the Euro in the last month, despite flatlining economic growth and rising inflation.

  • What is behind this pick-up in the value of the Pound against the Euro?
  • How will this impact UK businesses trading overseas?
  •  Will it last?

4 responses from the Newspage community

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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
The Pound's rise, and the Euro's decline, is being driven by another uptick in oil prices. Brent crude is up over 5% today, trading just shy of $97 a barrel, as the Strait of Hormuz remains effectively closed to international maritime traffic by Iran. In an environment of rising global fuel prices, markets are betting that the Bank of England will raise UK interest rates faster and further than the European Central Bank. This will benefit UK businesses importing from the EU and holidaymakers looking to book an Easter break or summer holiday on the continent. In such a volatile situation, one thing seems certain: a sustained period of volatility ahead.
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Mike Staton
Director at Staton Mortgages
The Pound rising right now isn’t because the UK economy is strong, it’s because the Eurozone looks even weaker and markets think UK interest rates will stay higher for longer. Higher rates means stronger currency. It's as Simple as that.

For UK businesses, this is a mixed bag. Imports get cheaper, but exporters get hit because British goods become more expensive overseas. So anyone trading abroad could feel the squeeze.

Will it last? Unlikely. Growth is flat, inflation is still stubborn, and confidence in the UK economy isn’t exactly booming. This feels like a short-term market reaction, not real strength.

We’ve seen this before, the Pound goes up on expectations, then drops when reality kicks in.
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Prem Raja
Head of Trading Floor at Currencies 4 You
The Pound’s recent strength against the Euro is less about strong UK fundamentals and more about relative market pricing. UK growth has been sluggish, but rising oil prices driven by geopolitical tensions have pushed inflation risks higher again. As a result, markets are now less confident that the Bank of England will cut interest rates next week or in the near term. That shift in expectations has helped stabilise and support Sterling.

At the same time, the Euro has been under pressure because the eurozone is seen as more exposed to higher imported energy costs. In that sense, part of Sterling’s rise reflects Euro weakness rather than strong confidence in the UK economy.

For UK businesses, the impact is mixed. Importers paying suppliers in Euros benefit from lower costs, while exporters may find UK goods slightly less competitive. In contrast, Sterling has not strengthened against the US Dollar, which continues to attract safe haven flows during geopolitical uncertainty.

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Rohit Parmar-Mistry
Founder at Pattrn Data
A 1% move in GBP/EUR is noise for traders but it matters if you price in euros and pay costs in pounds. The recent lift looks less like a sudden UK miracle and more like relative rates and positioning: the market has been less pessimistic on the UK than it was, while the euro has been dragged around by weak growth signals, energy sensitivity and what investors think the ECB will do next.

For UK exporters, a stronger pound can pinch margins fast if you have fixed euro pricing. For importers, it is a bit of breathing space, but do not bank it as "the new normal". FX trends love to reverse the moment a data print surprises or risk appetite turns.

SMEs get hurt because they treat FX as an afterthought until a margin disappears. The boring play is the right one: stress test your next quarter at worse levels, tighten invoicing terms, and hedge what you cannot afford to lose. If you cannot explain your FX exposure in one sentence, you are taking a view by accident.