LONDON, June 20 Reuters The pound traded lower against the dollar and the euro on Tuesday, as money market traders awaited pivotal inflation data due on Wednesday, ahead of the Bank of England39;s monetary policy meeting this week.

At 9000 GMT, the pound was 1.277 , down 0.14 against the dollar, while the euro rose 0.2 to 85.59 pence.

On Wednesday, official data for inflation in May will be published.

Last month, Britain reported consumer prices eased to 8.7 in annual terms in April, down from 10.1 in March, with food and nonalcoholic drink price inflation in double digits at 19.1 in April from 19.2 the month before.

The latest industry data from market researcher Kantar on Tuesday showed grocery inflation in Britain eased slightly for the third month in a row in June, but was still well into double digits.

The outcome of the latest inflation figures could be a huge factor for the BoE39;s Monetary Policy Committee on Thursday.

The market sees a 73 chance that the BoE will hike interest rates by 25 basispoints bps and a 27 chance of 50 bps to 5, up from the previous day.

Twoyear government bond yields remained above 5 on Tuesday, after slightly moving above Monday39;s 5.085 peak for the first time since the 2008 financial crisis.

Adding to the expectation, 64 economists in a Reuters poll last week said they saw the BoE adding another 25 bps to the interest rate, with a majority forecasting the bank rate to peak at 5.00 by the end of August.

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