POUND Sterling is at a 10-month high against the Euro today as experts urge Brits to “buy your holiday money now”.
The Pound hit €1.162 this morning – the highest level it’s been at since August 2025.
Experts said British holidaymakers, importers and overseas property buyers will be given a welcome boost in spending power.
They said investors are increasingly favouring the UK currency amid expectations that interest rates will remain higher in Britain than in the Eurozone.
Experts say the rally has been driven by higher UK bond yields and a wider interest-rate differential between the Bank of England and the European Central Bank (ECB).
This has made Sterling more attractive to international investors, while softer economic momentum and easing inflation pressures across the Eurozone have weighed on the currency.
Markets have also reacted positively to a calmer political backdrop following the recent US-Iran peace agreement.
Buy your Euros now
Prem Raja, Head of Trading Floor at Currencies 4 You, said Brits can enjoy the extra spending power in Europe.
He added: “Buy your holiday money now. The Pound is having one of its strongest periods against the Euro in almost a year. Holidaymakers, overseas property buyers and importers are the big winners as their money goes further abroad.
“The question now is whether it lasts. While the recent move has been driven by stronger UK data and a weaker Euro, currency markets remain vulnerable to economic surprises and geopolitical developments. For now, Sterling holders will be enjoying the extra spending power.”
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said the markets are giving Andy Burnham, the expected new Prime Minister and replacement for Keir Starmer, the benefit of the doubt.
He added: “As ever in currency markets, value is relative. On the Pound side, elevated UK bond yields remain a key driver while the carry trade still matters: the 10-year gilt yield sits 63% above the German Bund and 29% above the French equivalent, drawing capital into the Pound versus the Euro provided global sentiment stays constructive, currently helped by the US-Iran peace accord.
“Markets also seem willing to give Andy Burnham the benefit of the doubt or have simply priced in the ‘least-bad’ outcome. On the Euro side, yesterday’s Eurozone PMI showed inflationary pressures easing sharply in June, reducing expectations of further ECB hikes and weighing on the single currency.
“Still, it’s early days in the UK’s transition, with key risks ahead including a leadership contest or coronation, a snap election, and the next Chancellor’s identity. Winners: UK businesses importing from the EU, British holidaymakers heading to the Med, and anyone buying property on the continent.”
Holidaymakers, overseas property buyers and importers are the big winners
Paul Denley, CEO at London-based Oakham Wealth Management, said businesses who export to Europe will lose out.
He added: “Sterling’s strength reflects several converging forces. The Bank of England’s policy rate sits around 150 basis points above the ECB’s, making Sterling attractive to yield-hungry investors. UK data has also held up better than expected, while the Euro has faced its own headwinds from softer growth and a stronger dollar.
“Whether it lasts is another question. Exchange rates are notoriously difficult to forecast and this move has been driven as much by shifting expectations as fundamentals. If the rate gap narrows, that tailwind fades. Context matters too: Sterling was trading higher against the euro a year ago.
“Winners include holidaymakers, importers and businesses buying overseas. Losers include exporters, overseas earners, and UK investors with global exposure, whose foreign assets translate back into fewer pounds.”
Nouran Moustafa, Practice Principal & IFA at Roxton Wealth, said one misstep by the next government could undo any gains.
She added: “Sterling is rising for two reasons: markets are pricing in a calmer UK political handover, and the Euro is weakening as investors expect the ECB to be less hawkish than the Bank of England. The Pound has not suddenly been given a vote of confidence.
“It is a relative trade. Investors are looking at a possible pro-business, fiscally disciplined team in Westminster and comparing that with softer Eurozone momentum. Will it last? Only if the next government makes the numbers add up. Any sign of unfunded spending, higher borrowing or a messy leadership process could reverse it quickly.
“The winners are British holidaymakers, importers and anyone buying in Euros. The losers are UK exporters, businesses paid in Euros and overseas visitors, because Britain becomes more expensive. A strong Pound feels good at the airport; it is less helpful if it starts hurting competitiveness.”
