Sterling came under pressure against the euro after a cooler-than-expected UK services inflation reading reinforced expectations that the Bank of England could begin cutting interest rates sooner than previously thought. The move pushed EUR/GBP to a two-week high, extending a shift from earlier inflation updates that had at times delayed easing expectations. Markets had previously responded to firmer March UK inflation by reducing the implied probability of a near-term BoE cut, while April data steadied expectations as headline inflation matched forecasts and services inflation remained elevated at 5.9%. The latest update suggests that underlying price pressures in the services sector, a key gauge for policymakers, have softened enough to raise rate-cut bets and weigh on the pound. The euro was also supported by a European Central Bank stance that, in the new report's framing, remained in no rush to ease because of persistent eurozone inflation pressures. Traders are now focused on upcoming UK growth data and BoE communication for confirmation of whether softer services inflation marks a sustained turn in the policy outlook.