LONDON, Jan 29 Reuters The Bank of England is likely to hint this week it is aware that the time start cutting rates is nearing, but that is unlikely to bring sterling this year39;s secondbest performing major currency down with it.

The consensus in markets is that one or two of the monetary policy committee39;s hawks will stop voting for rate hikes at their meeting on Thursday, but Barclays analysts say this is unlikely to derail sterling.

They point to last week39;s business activity data which showed Britain39;s economy started 2024 on a stronger footing, notable in comparison with equivalent euro zone data that showed businesses there faced a tougher start to the year.

We expect such demandside outperformance to continue supporting the pound, particularly versus the euro and Swiss franc, said Barclays, who expect the BoE to remove some its postmeeting statement39;s hawkish language.

Changes in expectations of central banks policy rates are a major driver of currency markets at present.

Markets are currently showing around a 50 chance the first BoE rate cut will come in May, and think it is much more likely the Federal Reserve and European Central Bank will be cutting by then.

The BoE has held its key Bank Rate at 5.25 since August like the flat top of South Africa39;s Table Mountain after a speedy rise, in BoE chief economist Huw Pill39;s oftused metaphor.

This policy has helped support sterling as some central banks have started discussing interest rate…