EUR/GBP holds steady below 0.8700 as traders await BoE rate decision

• EUR/GBP flat lines near 0.8670 in Thursday's early European session.
• BoE is expected to keep rates on hold at 4.0% later on Thursday. 
• ECB's Guindos said the current interest rate is appropriate based on inflation developments.

The EUR/GBP cross trades on a flat note around 0.8670 during the early European session. Traders prefer to wait on the sidelines ahead of the Bank of England (BoE) interest rate decision. aThe BoE is expected to hold interest rates steady at 4.0% at its September meeting later on Thursday. 

UK inflation, as measured by the Consumer Price Index (CPI), was unchanged in August, the Office for National Statistics (ONS) reported on Wednesday. The UK headline Consumer Price Index (CPI) rose 3.8% over the year in August, at the same pace seen in July, softer than the 3.9% expected. 

Financial markets are widely predicting that BoE policymakers will keep interest rates on hold at 4.0% on Thursday amid signs of sustained inflationary pressures at almost twice its official 2% target rate.

Rising expectations that the European Central Bank (ECB) is done cutting rates could underpin the shared currency against the USD. ECB Governing Council members Martins Kazaks and Gediminas Simkus said on Tuesday that interest rates don't need to be cut further right now, though neither of them ruled out an eventual move. 

Meanwhile, ECB Vice President Luis de Guindos said on Wednesday that the current interest rate is appropriate based on inflation developments and the transmission of monetary policy.