EUR/GBP extends downside below 0.8350, investors await the BoE rate decision

• EUR/GBP tumbles to near 0.8345 in Wednesday's early European session.
• The BoE is expected to cut interest rates at its November meeting on Thursday. 
• Diminishing odds for larger ECB rate cuts might help limit the EUR's losses. 

The EUR/GBP cross extends its decline to around 0.8345 during the early European session on Wednesday. The rising expectation that the Bank of England (BoE) will cut rates slowly supports the Pound Sterling (GBP) and weighs on the cross. The BoE interest rate decision will be in the spotlight on Thursday. 

The UK central bank is anticipated to reduce its interest rate from 5.0% to 4.75% at its Monetary Policy Committee meeting on Thursday. The markets believe the heightened UK government spending may be inflationary, triggering the BoE to slow the expected path of rate cuts. 

"Markets have already tempered expectations [and are] now forecasting two or three rate cuts in 2025, down from earlier projections of four or five," said Daniela Sabin Hathorn, senior market analyst at Capital.com. "The BoE is now expected to cut rates less aggressively than the Fed and the ECB," Hathorn added in a note.

The European Central Bank (ECB) has already reduced rates three times already this year as inflation risks in the Eurozone ease faster than expected. The central bank lowered the deposit rate by a further 25 basis points (bps) at its October meeting. The decision came after inflation in the euro area cooled to 1.8% in September, below the ECB's 2% target.

Nonetheless, the stronger-than-expected Eurozone Gross Domestic Product (GDP) could trim the ECB rate cut expectation, which caps the downside for the shared currency. The ECB's President Christine Lagarde and Vice President Luis de Guindos are scheduled to speak later on Wednesday. Investors will take more cues from the speeches. Less dovish remarks could lift the EUR against the GBP for the time being.