0846 GMT - U.K. interest-rate rise expectations look excessive, leaving sterling at risk of falling, MUFG Bank's Lee Hardman says in a note. "The lack of second round inflation effects so far and continued weakness in the U.K. labor market is helping to ease some of the building pressure on the Bank of England to tighten policy." Although the BOE might struggle to look past headline inflation potentially reaching 4% in the new year unless energy prices ease, rate-rise expectations appear overdone, he says. Data Wednesday showed inflation rose to 3.1% in August, as forecast, but core inflation held at 2.6%. The euro rises 0.1% to 0.8567 pounds. Sterling is steady against the dollar at $1.3467.