July 30 Reuters The pound held steady against the dollar on Tuesday as investors looked to the Bank of England39;s BoE interest rate decision later in the week and assessed the fallout of spending cuts announced by the new British finance minister

Sterling traded down 0.05 at 1.2854, after having touched a near threeweek low of 1.2807 against the dollar in the prior session.

The euro gained 0.17 against the pound to 84.27 pence, with the common currency helped by data showing the euro zone39;s economy grew slightly more than expected in the three months to June.

Traders are pricing in a near 60 chance that the British central bank will cut interest rates by 25 basis points bps to 5.0 on August 1, according to LSEG39;s interest rate probabilities app, and see rate cuts of 52 bps by the end of the year. 0BOEWATCH

With the decision so finely balanced investors are nervous about trading sterling ahead of the decision.

If we just go back week or two ago, the market was thinking 5050 chance of a rate cut but economist surveys are more confident that there will be a move this week, said Jane Foley, head of FX strategy at Rabobank in London.

Prices in British shops rose at the jointslowest rate since October 2021 this month, held down by falls in the cost of nonfood items, the British Retail Consortium said.

While headline consumer price inflation targeted by the BoE held at its 2 target in June, the central bank is most concerned about services price inflation, which at…