Investing.com — UBS analysts say the European Central Bank and the Bank of England are likely to adopt “similar” stances on monetary policy, although the BoE is expected to take a slightly more hawkish approach.

In a note to clients, the analysts added that the economic situation in both regions is “quite similar, with a slight tilt towards strength in the latter and weakness in the former.”

For these reasons, they estimated that the euro-British pound pair would trade “slightly weaker” but would stay close to the current range of £0.83-£0.85. Volatility in the currency pair, they added, “will remain muted.”

The comments come after the Bank of England left its benchmark interest rate unchanged at 5.0% last week. Officials have said they are keen to gradually ease monetary policy in the future after cutting interest rates in August.

Economists had widely expected the move, particularly after UK consumer price growth came in at an annualised 2.2% last month, close to the bank’s medium-term target, but services inflation was up 5.6% year-on-year. Price growth in the services sector is seen as a key benchmark for the BoE.

The prospect of potentially high services inflation in the UK has led many forecasters to bet the BoE will move slower than its peers in cutting interest rates.

Other indicators of price pressures were mixed. Wage growth, another essential indicator watched by the BoE, cooled and the broader economy stagnated in July.

Meanwhile, in early September, the European Central Bank lowered borrowing costs for the second time in three months.

The Governing Council, which sets interest rates, announced a cut in the deposit rate, the ECB’s mechanism for steering monetary policy, by 25 basis points to 3.5%. The ECB left its benchmark deposit rate unchanged at 3.75% in July, after cutting it from a record 4% in June.

Since that meeting, core inflation in the eurozone has fallen to a two-year low of 2.2%.

However, speaking at a news conference after the decision was announced, ECB President Christine Lagarde stressed that the central bank had not “committed” to a specific path for interest rates and would rely on the data before taking future policy actions.