Sterling reversed earlier gains against the dollar and euro in later trade as markets braced for policy decisions from the Bank of England on benchmark interest rates aimed at curbing soaring inflation.

The Bank of England will hold its latest policy meeting tomorrow, and is expected to hike interest rates by 75 basis points.

The meeting will follow the US Federal Reserve's own rates decision this evening, with investors watching for any clues as to the path of future rate hikes.

Having started the day in a positive position the pound slipped against the dollar and euro in later trade.

Sterling had fallen by 0.14% against the euro by 6pm Irish time, with one pound buying €1.161.

Against the dollar, the pound was down 0.07% at $1.148.

Currency analysts said the Fed meeting would likely set the tone ahead of the Bank of England's decision tomorrow.

Markets are also focused on whether the Bank of England will signal it may not need to hike rates as fast as thought.

The pound has rebounded since slumping to a record low of $1.03270 in late September, prompted by market fallout over the vast tax-cutting plans of Liz Truss' short-lived government.

Sterling has broadly gained against the dollar since then, supported by investors warming to the more fiscally moderate prime minister Rishi Sunak.