Investing.com - The euro hit session highs against the broadly weaker pound on Monday, as speculation that the Bank of England would cut growth forecasts later this week curbed investor demand for sterling. EUR/GBP hit 0.8529 during European morning trade, the session high; the pair subsequently consolidated at 0.8525, rallying 0.76%. The pair was likely to find support at 0.8455, the session low and resistance at 0.8593, the high of January 31. Sentiment on pound was hit by expectations that the BoE would cut its forecast for economic growth in Wednesday’s inflation report and warn that inflation is likely to remain above the bank’s 2% target until early 2015. Last week the BoE warned that the economic recovery would be “slow and sustained� and “likely to remain muted in the near term� after it announced a decision to leave interest rates on hold at 0.5% and keep its easing program unchanged. The euro remained under pressure after the European Central Bank said Thursday that it would monitor developments in the markets to see if the stronger euro had an effect on the inflation outlook. Sentiment on the single currency was also hit by uncertainty ahead of upcoming elections in Italy and renewed political tensions in Spain where the government has become embroiled in a corruption scandal. Elsewhere, the euro was little changed near two-week lows against the dollar, with EUR/USD inching up 0.08% to 1.3379 and rose to session highs against the yen, with EUR/JPY rising 0.80% to 124.90. The eurogroup of euro zone finance ministers was to hold talks in Brussels later in the session, following last week’s European Union summit. EU leaders reached an agreement on a seven year budget on Friday. European governments will contribute slightly less to this budget than they did for the previous seven year budget, following calls to curb spending by Brussels.

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