According to Jinshi, ING analyst Francesco Pesole said that the pound may strengthen as the Bank of England is unlikely to cut interest rates next week.

Pesole said British economic data hindered market expectations of the Bank of England to cut interest rates as aggressively as the Federal Reserve, which means that sterling may continue to rise against the dollar.

Meanwhile, the divergence in growth prospects between the eurozone and the UK is positive for GBP/EUR. While GBP is starting to look relatively expensive, a sustained recovery to 0.85 against EUR/GBP may not be possible unless the Bank of England gives strong hints of further rate cuts.