On Tuesday, March 24, 2026, the EUR/GBP currency pair traded around 0.8650, holding steady as investors reacted to weaker-than-expected activity data from both the Eurozone and the United Kingdom, signaling a slowdown in growth [1]. In the Eurozone, the preliminary HCOB Composite Purchasing Managers Index (PMI) dropped to 50.5 in March from 51.9 in February, falling short of market expectations. The services sector was the main driver of this decline, with its PMI falling to 50.1, while the manufacturing sector showed improvement, rising to 51.4 and indicating partial recovery in industrial activity [1].
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, highlighted that the PMI data is raising stagflation concerns. He attributed this to the ongoing war in the Middle East, which has caused a sharp increase in energy prices and disrupted supply chains. As a result, supplier delivery times have lengthened significantly, and firms' costs are rising at their fastest pace in more than three years [1].
The United Kingdom experienced a similar trend, with the S&P Global Composite PMI declining to 51 in March from 53.7 previously. Both services and manufacturing sectors contributed to this slowdown, with the services sector seeing a particularly pronounced drop to 51.2 from 53.9, indicating a significant loss of demand momentum [1]. TD Securities analysts noted that this deterioration is occurring amid intensifying cost pressures, especially from higher energy prices and ongoing supply disruptions. They expect UK inflation to remain steady at 3% year-on-year in February, but anticipate a potential rise in the coming months as the energy shock increasingly impacts the data [1].
Market participants are now awaiting speeches from European Central Bank (ECB) officials later in the day and UK inflation data due on Wednesday, which could provide further guidance on monetary policy and influence the next move in EUR/GBP [1].
CONCLUSION
The disappointing PMI data from both the Eurozone and UK has heightened concerns about stagflation and persistent cost pressures, particularly from rising energy prices. While EUR/GBP remains steady for now, upcoming ECB speeches and UK inflation data are expected to shape market direction in the near term.