0719 GMT - The Bank of England is likely to cut interest rates on Thursday but sterling's reaction to that should be muted, Danske Bank analysts say in a note. A rate cut is widely expected and the BOE will likely maintain guidance for a gradual pace of policy easing, they say. Beyond Thursday's decision, Danske Bank expects sterling to weaken as it expects the BOE to lower rates more than markets expect in 2026. Elevated uncertainties, signs of weaker U.K. growth and a positive correlation to negative dollar environment could also weigh on the U.K. currency. Danske Bank expects the euro to rise to 0.89 pounds in six to 12 months. The euro is last 0.2% lower at 0.8710 pounds. Against the dollar, sterling trades flat at $1.3281. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

August 04, 2025 03:19 ET (07:19 GMT)

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