• EUR/GBP trades with mild losses around 0.8740 in Wednesday’s early European session.
• BoE’s Lombardelli favors slower rate cuts, saying that she is more worried about upside risks to inflation.
• The ECB has adopted a cautious approach to monetary policy, suggesting a pause in the rate-cutting cycle. 

The EUR/GBP cross posts modest losses near 0.8740 during the early European session on Wednesday. Hawkish remarks from the Bank of England (BoE) policymakers provide some support to the Pound Sterling (GBP) against the Euro (EUR). Traders will keep an eye on the BoE's Governor Bailey speech later on Wednesday. On Friday, the UK's monthly Gross Domestic Product (GDP) report will be released. 

BoE Deputy Governor Clare Lombardelli said on Tuesday that she was worried about upside risks for UK inflation and the central bank should move more slowly to lower borrowing costs as it approaches the end of its interest rate-cutting cycle. Lombardelli’s comments lift the GBP and create a headwind for the cross in the near term. 

Nonetheless, growing expectations that the UK central bank will cut interest rates by 25 basis points (bps) to 3.75% at its December monetary policy meeting next week could undermine the GBP. Financial markets are currently pricing in nearly an 88% chance of a quarter-point reduction at the upcoming BoE meeting after signs from economic data that inflation pressure has eased, according to the Reuters poll. 

Meanwhile, rising bets that the European Central Bank (ECB) is done cutting interest rates could support the Euro. ECB President Christine Lagarde noted in recent statements that the central bank is not pre-committing to a particular rate path and will maintain a data-dependent, meeting-by-meeting approach to future decisions. She added that the Eurozone economy is in a "good place," with inflation close to the 2% target.