The Euro (EUR) depreciated for the third consecutive day against the British Pound (GBP), with the EUR/GBP pair hitting fresh three-week lows just above 0.8650 on Thursday, April 23, 2026. This movement followed the release of robust preliminary UK business activity data, which contrasted with less inspiring figures from the Eurozone's April HCOB Purchasing Managers’ Index (PMI) [1].
UK Manufacturing PMI surged to 53.6 in April from 51 in March, significantly beating market expectations of a mild contraction at 49.9. The Services PMI also rose to 52.0 from 50.5 in March, defying consensus forecasts of stagnation at 50.0. The UK Composite PMI improved to 52.0 from 50.3, indicating broad-based expansion in business activity. However, the survey highlighted record-high input costs since 1984 and ongoing supply chain disruptions attributed to the war in Iran, which are clouding the near-term economic outlook [1].
In contrast, the Eurozone's HCOB Manufacturing PMI reached its highest level in nearly four years at 52.2, up from 51.6 in March. Despite this improvement, the region's services sector contracted sharply, with the Services PMI dropping to 47.4 from 50.2, dragging the composite index down to 48.6 from 50.7 in March. This divergence in sector performance has raised concerns about stagflation in the Eurozone and presents a significant challenge for the European Central Bank (ECB) as it navigates inflationary pressures amid fragile economic growth [1].
The strong UK PMI data provides the Bank of England (BoE) with further justification to maintain its current monetary policy stance in the near term, which is seen as supportive for the Pound. Meanwhile, the weaker Eurozone data is feeding market concerns about the region's economic outlook [1].
CONCLUSION
The latest PMI data has strengthened the British Pound against the Euro, as the UK economy shows resilience while the Eurozone faces sectoral weakness and stagflation risks. Market participants are likely to view the BoE's policy outlook as stable, while the ECB faces a more complex challenge.