LONDON: Sterling edged up against the dollar and euro on Friday, as traders looked ahead to a Bank of England policy meeting next week that will likely set the tone for the currency in the coming weeks.

The Bank of England (BoE) is expected to hold interest rates at 5.25% on Feb. 1, but any guidance on the timing of rate cuts will be watched closely.

Sterling was last up 0.2% against the dollar at $1.27295. The euro was down 0.1% to 85.31 pence.

Britain’s economy started 2024 on a stronger footing, according to a survey of businesses published on Wednesday, prompting investors to reduce their bets on the BoE moving quickly to cut interest rates.

Money markets are currently pricing a 42% chance of a cut in May, while June is given a 74% chance.