• EUR/GBP trades with mild gains around 0.8440 in Friday’s early European session. 
• The BoE is anticipated to reduce its borrowing costs from a 16-year high on August 1. 
• French and German declines in business confidence increase the probability of an ECB rate reduction.

The EUR/GBP cross recovers to 0.8440 during the early European session on Friday. The Pound Sterling (GBP) edges lower amid rising bets that the Bank of England (BoE) would cut its interest rate next week. 

Investors are betting on a 45% chance of a quarter-point rate cut by the BoE at its upcoming policy meeting on August 1. UBS analysts noted that the BoE is expected to deliver the first 25 basis points (bps) cut in early August and another 25 bps in November, bringing the interest rate to 4.75% by the end of 2024. “The key reason why we expect the MPC to cut rates is the recent data,” said UBS analysts.