The pound euro exchange rate (GBP/EUR) is falling away from €1.17.
The pound is drifting lower ahead of CPI data on Wednesday and the BoE rate decision on Thursday.
CPI is expected to fall to 3.6%. Cooler inflation could fuel bets that the BoE will start to cut rates sooner.
The BoE is expected to leave rates unchanged on Thursday.
The euro is rising after stronger-than-expected German ZEW economic sentiment data, which jumped to 31.7 from 19.9, marking the 8th straight monthly increase.
Meanwhile, eurozone wage growth eased in Q4 to 3.1% from 5.2%, which could encourage the ECB to cut rates sooner.