• EUR/GBP is marching towards 0.8800 as the ECB is expected to announce a bumper rate hike.
• Eurozone HICP data is seen unchanged despite declining energy prices.
• The BoE is preparing for its 12th consecutive interest rate hike to contain double-digit inflation.

The EUR/GBP pair is oscillating in a narrow range below 0.8890 in the Asian session. The cross is expected to recapture the round-level resistance of 0.8800 ahead as investors are anticipating a bumper interest rate hike announcement from the European Central Bank (ECB) this week.

Consumer spending is getting resilient in Eurozone as the shortage of labor has passed bargaining power from hiring agencies to job seekers. The context is supporting a mega interest rate hike announcement from ECB President Christine Lagarde to contain stubborn inflation.

But before that, Eurozone inflation data will be keenly watched. Tuesday’s Eurozone Harmonized Index of Consumer Prices (HICP) data hold significant importance as it will be critically considered before making an interest rate decision by the ECB.

As per the consensus, the preliminary headline Harmonized Index of Consumer Prices (HICP) (April) is seen unchanged at 6.9% and 0.9% on a quarterly and monthly basis. Also, annual core HICP is seen steady at 5.9% while monthly core HICP could land lower at 1.1% from the former release of 1.3%.

On the Pound Sterling front, United Kingdom’s inflation expectations have trimmed significantly as the Bank of England (BoE) is preparing for its 12^th consecutive interest rate hike. Citi said its monthly survey conducted by market research company YouGov showed public expectations for inflation in 12 months' time eased to 5.2% in April from 5.4% in March and expectations for five to 10 years ahead fell to 3.6% from 3.7%, as reported by Reuters.