EUR/GBP edges lower toward 0.8350 ahead of Eurozone HICP inflation data

• EUR/GBP loses ground despite a less-dovish sentiment surrounding the ECB following the robust Eurozone GDP data.
• Traders await Eurozone Harmonized Index of Consumer Prices (HICP) data on Thursday.
• UK budget includes £40 billion in tax increases aimed at reducing public finance deficits and enhancing funding for public services.

EUR/GBP trades slightly lower during early European hours on Thursday near 0.8360, following strong gains in the previous session. This downside may be limited, as the Euro could find support from investors scaling back expectations of a large rate cut by the European Central Bank (ECB) in December.

This sentiment shift regarding the ECB's policy outlook comes after stronger-than-expected economic data from the Eurozone and Germany released on Wednesday. Investors will keep an eye on the Eurozone Harmonized Index of Consumer Prices (HICP) on Thursday.

According to preliminary estimates from Eurostat, the seasonally adjusted Eurozone Gross Domestic Product (GDP) expanded by 0.4% quarter-over-quarter in Q3, surpassing the expected 0.2% increase. Year-over-year, the Eurozone's GDP grew by 0.9%, above the forecasted 0.8% growth.

In Germany, GDP rose by 0.2% QoQ in Q3, recovering from a 0.3% decline in Q2 and exceeding expectations of a 0.1% contraction, based on preliminary data. Additionally, Germany's Consumer Price Index (CPI) showed an annual inflation rate of 2.0% in October, a three-month high, up from 1.6% in September and above the projected 1.8%, according to preliminary estimates.

The EUR/GBP cross also gained support as the Pound Sterling (GBP) weakened following the UK Labour government's first budget announcement on Wednesday. This budget includes £40 billion in tax hikes aimed at reducing public finance gaps and bolstering public services, as reported by CNBC. A major revenue source in the budget is a rise in National Insurance (NI) contributions, a tax on earnings paid by employers.

Furthermore, traders are likely watching an upcoming keynote address by Bank of England (BoE) Deputy Governor Sarah Breeden at a conference hosted by the Hong Kong Monetary Authority and Bank for International Settlements on the "Opportunities and Challenges of Emerging Technologies in the Financial Ecosystem."