---
title: Sterling Has Its Biggest Weekly Gain Against the Euro in Months as Burnham Lists Options for Closer EU Ties
description: Sterling rose about 1.2% to 1.3% against the euro in the week to 2 October as Andy Burnham set out options for UK-EU ties ahead of a possible November summit.
author: Dr Marina Nani (Editor-in-Chief)
date: 2026-10-04T11:00:00.000Z
updated: 2026-10-04T11:53:23.195Z
canonical: https://www.sovereignmagazine.com/article/pound-euro-exchange-rate-weekly-gain-uk-eu
image: https://cdn.nanimediahouse.com/pexels-a-detailed-aerial-shot-of-the-historical-bank-of-england-in--27796863.jpg
categories: Markets, Economy, EU Focus, Politics
content_type: News
region: United Kingdom, London
publication: Sovereign Magazine
---

Sterling had its biggest weekly gain against the euro in months in the week to Friday 2 October, rising roughly 1.2% to 1.3%, in the same week that Prime Minister Andy Burnham reopened the question of how close the UK should be to the European Union.

On the European Central Bank's reference rates, the pound euro exchange rate went from €1.1622 on 25 September to €1.1760 on 2 October, a rise of about 1.2%; at Friday's market close it was about 1.3%. At the reference rate, £1,000 was worth about €1,176, against about €1,162 a week earlier and about €1,146 at the start of the year. Against the dollar, the pound was little changed on the week after two weekly falls.

Analysts disagree on whether the politics will give sterling lasting support. Much of the move also reflects weakness in the euro, which fell against the dollar over the same week while the pound held steady.

## Burnham's Options for the UK and the EU

Burnham, who campaigned to stay in the EU in the 2016 referendum and succeeded Keir Starmer as Prime Minister in July, told Labour's annual conference on 29 September that Brexit had done "more harm than good" and that the country must "decide on a long-term relationship" with the EU. On BBC Radio 4's Today programme on 30 September, he was reported as saying the options included the single market and the customs union, "or we could go all the way". He went on: "So there are clearly options that need to be considered, and we have to look at what is doable, and what would be the pros and cons of each."

He did not say the UK should rejoin. The UK has been outside [the EU single market and customs union](https://www.sovereignmagazine.com/article/the-real-toll-brexit-has-taken-on-the-uk-economy) since it left the bloc, and under Starmer, Labour pursued [closer alignment with EU food and farming rules while staying outside the single market](https://www.sovereignmagazine.com/article/uk-eu-deal-labour-working-brexit).

The next UK-EU summit is pencilled in for around 20 November, not yet confirmed by either side. An earlier summit planned for 22 July was postponed.

## Analysts Split on Sterling and the UK-EU Reset

Evelyne Gomez-Liechti, multi-asset strategist at Mizuho, said that "reports suggesting progress towards a broader UK-EU reset may be modestly supportive for Sterling sentiment", according to Reuters.

> "Obviously, we are years away from any clarity here, but let's see whether sterling catches a bid into a supposed UK-EU summit due around 20 November."
> — Chris Turner, ING

Chris Turner, global head of markets at ING, wrote in a note on 1 October that "any move by the UK to rejoin the EU would likely be seen as a positive by the foreign exchange market, having witnessed sterling's crash following the Brexit vote in 2016." In the same note he said the market was "years away from any clarity" and would watch whether buyers of sterling stepped in ahead of the November summit.

Matthew Ryan, head of market strategy at Ebury, said, according to Reuters: "We don't expect this to provide any lasting support for the pound, however, as another referendum is both fanciful and, in our view, highly unlikely to see the light of day."

## French Debt, the Fed and the Pound vs Euro Rate

Turner wrote in his 1 October note that the euro had fallen noticeably against the pound that week and that "one could argue that independent euro weakness is starting to emerge here".

On ECB reference rates, the euro fell about 1.6% against the dollar over the week. Reuters linked the euro's fall to concern over the public finances of some of the euro area's most indebted countries, and to the energy shock. France's 10-year borrowing cost stood about 1.2 percentage points over German Bunds on 30 September, the widest since 2012 according to market reports.

The dollar had been firmer since the Federal Reserve raised its target range by a quarter point to 3.75%-4.00% on 16 September, in a 12-0 vote. The pound touched $1.3181 on Thursday 1 October, its lowest since 25 June, according to Reuters. It recovered on Friday after the US Bureau of Labor Statistics reported that employers added 29,000 jobs in September and that unemployment was 4.2%, and ended the week about where it started against the dollar.

Over 2026 so far, on ECB reference rates, sterling is up about 2.6% against the euro and down about 2% against the dollar.

## The Dates Ahead for the Pound to Euro Forecast

UK inflation figures for September are due on 21 October. Consumer prices rose 3.1% in the 12 months to August, up from 2.9% in July.

Chancellor John Healey presents the Budget on 28 October, the date he gave in a [letter to the Treasury Select Committee](https://www.gov.uk/government/publications/chancellor-letter-to-the-treasury-select-committee-tsc-budget-2026-date) published on 31 July, which also asked the Office for Budget Responsibility to publish its forecast alongside it.

The ECB meets on 28 and 29 October. Its deposit rate is 2.50% after a quarter-point rise decided on 10 September, which took effect on 16 September.

The Bank of England announces its next decision on Thursday 5 November. Its Monetary Policy Committee [held Bank Rate at 3.75% on 17 September](https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2026/september-2026) by six votes to three, with Megan Greene, Catherine Mann and Huw Pill voting for 4%. Governor Andrew Bailey said that "so far, higher global energy costs have had a limited effect on price and wage setting in the UK. But the longer this volatility persists, the bigger the impact it will have on inflation, and the more likely it is we will need to raise Bank Rate to ensure that inflation falls back to our 2% target."

Traders are pricing in a rise in Bank of England interest rates of about 0.3 percentage points by the end of this year and about 0.9 points by the end of 2027, according to Reuters.

After that comes the UK-EU summit pencilled in for around 20 November. Whether the prospect of closer ties gives sterling lasting support before then is the question on which Gomez-Liechti, Turner and Ryan differ.

## FAQ

**Q: Is the pound getting stronger against the euro?**
In the week to 2 October it was: sterling rose roughly 1.2% to 1.3% against the euro, its biggest weekly gain against the euro in months, and on ECB reference rates it is up about 2.6% against the euro since the start of 2026. Part of that reflects weakness in the euro, which fell about 1.6% against the dollar in the same week while the pound was little changed against the dollar.

**Q: Is the UK rejoining the EU?**
No decision has been taken. Prime Minister Andy Burnham said on BBC Radio 4's Today programme on 30 September that the options include the single market, the customs union "or we could go all the way", and that the pros and cons of each need to be considered. He did not say the UK should rejoin. A UK-EU summit is pencilled in for around 20 November, not yet confirmed.

**Q: What is the pound to euro forecast for 3 months?**
The analysts quoted in this article disagree. Mizuho's Gomez-Liechti sees reports of a UK-EU reset as modestly supportive for sterling, while Ebury's Ryan expects no lasting support. The next three months include UK inflation figures on 21 October, the Budget on 28 October, an ECB meeting on 28 and 29 October, a Bank of England decision on 5 November and the UK-EU summit pencilled in for around 20 November.