LONDON, Oct 26 Reuters Sterling sank to a threeweek low on Thursday after a slew of economic market data this week affirmed the view that the Bank of England BoE will likely hold rates steady at its policy meeting next week.

Sterling is heading for a third consecutive day of declines, down 0.2 to 1.2090, after briefly hitting its lowest since Oct. 4.

Against a weakening euro , it touched an almost oneweek low before flattening on the day at 87.25 pence.

I would attribute the latest weakening to dovish commentary from the BoE, UK data broadly coming in softer than expected and markets increasingly pricing out the risk of another hike and thus the conclusion of the hiking cycle, said Kirstine KundbyNielsen, an analyst at Danske Bank.

The pound has declined more than 6 against the U.S. dollar over the past three months.

Data on Tuesday showed a labour market that was loosening, while the flash reading of the SP Global UK Purchasing Managers39; Index PMI for the services sector fell in October to 49.2, the lowest reading since January.

Although inflation unexpectedly held steady at 6.7 in September, the highest of any major advanced economy, the BoE is expected to leave rates at 5.25 on Nov. 2, according to the vast majority of economists polled by Reuters.

Money markets now are pricing in no further rate increases, and rate cuts as early as June next year.

In an interview with the Belfast Telegraph published on Friday, BoE Governor Andrew Bailey said inflation data…