Financial markets are getting excited about a Bank of England rate cut potentially as early as this Thursday, ING's FX analyst Chris Turner notes.

EUR/GBP could come a little lower this week

"A couple of big investment houses have recently switched their call to a move this week. And from just a 6% probability of a rate cut this week, which was priced at the start of October, the market now attaches a 29% weight."

"As our UK economist James Smith writes here, we think the BoE will prefer to wait for the contents of the Autumn Budget later this month before making its next move. And with the UK terminal rate already priced at 3.25% for next summer, we find it difficult to justify a much lower pound on the back of an under-priced BoE easing cycle."

"EUR/GBP could come a little lower this week if the BoE retains some of the hawkishness discovered this summer. But we suspect buying interest returns in the 0.8730/50 area."