POUND Sterling has hit a nine-month high against the Euro – but is it time to buy your holiday cash?
The world has become a different place in the last two weeks after the Middle East exploded into conflict with oil prices rising, sparking fears inflation is going to spike across the world.
Evidence of how it is hitting everyday people in the UK is already clear in rising petrol prices and mortgage rates.
The Pound has remained stable against the US Dollar since Donald Trump started launching missiles at around $1.34.
But it’s looking stronger against the Euro, rising from €1.14 to €1.16 in just two weeks. It’s now at its highest against the Euro since June 2025.
Experts claimed this is due to expectations that the Bank of England will not cut its base rate in the coming months due to fears of inflation – unlike the European Central Bank.
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said Brits heading abroad should buy up their Euros now.
He added: “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.”
This will benefit Brit holidaymakers booking breaks
Prem Raja, Head of Trading Floor at Currencies 4 You, said the Pound’s rise reflects the Euro’s weakness.
He added: “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.”
For UK exporters, a stronger Pound can pinch margins fast
Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said businesses need to be aware of the value of the Pound and Euro changing.
He added: “A 1% move between the Pound and the Euro 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 European Central Bank (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’. Forex trends love to reverse the moment a data print surprises or risk appetite turns.
“Small businesses get hurt because they treat Forex 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 Forex exposure in one sentence, you are taking a view by accident.”
Mike Staton, Director at Mansfield-based Staton Mortgages, said the Pound’s strength will not last.
He added: “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.”
Photo by Christian Dubovan on Unsplash.
