EUR/GBP Rises as Oil Prices Fall and Central Banks Eye December Hikes

November 10, 2026 Priya Shah – Business Editor Business

The euro is edging higher against the pound, with EUR/GBP trading around 0.8357 on Tuesday, up 0.10% on the day yet still near levels last seen in April 2025.

The move comes as crude oil slides on hopes of diplomatic progress between the United States and Iran. West Texas Intermediate is retreating toward $83 per barrel, its lowest since August 31, and is down roughly 16% so far this month.

Cheaper oil offers relief to the eurozone, which relies heavily on imported energy. The better market tone is also easing pressure on French bonds: the spread between French and German 10-year yields has narrowed to around 145 basis points from about 175 at October’s peak. Political uncertainty and France’s budget challenges remain a risk for the single currency.

Fed's Waller Supports Rate Hike in December

Traders are weighing central bank comments for clues on December rate decisions. European Central Bank chief economist Philip Lane told Bloomberg Television that “it would certainly be prudent to raise rates” in December if data stay broadly unchanged, adding that he expects inflation to end the year “a bit” above 4%, with core and food inflation likely to rebound.

In the United Kingdom, Bank of England Deputy Governor Clare Lombardelli said she would not rule out a December rate hike, while adding: “at the same time, I still don’t have enough information.”

Fed Governor Waller sees December hike likely, opens door to half-point increase

The BoE voted 8-1 at its November meeting to raise its benchmark rate by 25 basis points to 4.00%, with external MPC member Catherine Mann favoring a larger 50-basis-point increase. The move marked the first hike since 2023, as policymakers seek to contain inflationary pressure from higher energy costs tied to the Middle East war.

Analysts at ABN Amro described the BoE’s latest guidance as firmly hawkish, noting the MPC “projected that inflation would reach around 5% in mid-2027” and “explicitly signaled another increase unless the Middle East conflict is resolved.”

Fed's Waller backs a December rate hike and floats a half-point move

The euro’s outperformance against sterling is being powered largely by the energy channel. Lower crude prices reduce the eurozone’s import bill, while the pound faces a central bank that has already delivered a hike and may deliver another.

Attention now turns to this week’s growth figures. The United Kingdom releases its first estimate of third-quarter GDP on Thursday, followed on Friday by updated eurozone GDP numbers, which traders will scan for fresh signals on the economic outlook.

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