Pound bulls hoping for a sustained recovery in the currency may be disappointed as this week brings a combination of domestic data and a European Union (EU) summit that may confirm the timing of the UK's referendum on its membership.

Sterling depreciated against most of its 16 major peers last week as Prime Minister David Cameron stepped up lobbying efforts to reach a deal that may allow him to hold a vote as early as June.

A date is only likely to be set though following the EU summit in Brussels from February 18 to 19.

Reports this week are forecast to show inflation and wage growth remained little changed according to economists in Bloomberg surveys.

"Data will be the main driver for the pound"said Thu Lan Nguyen a currency strategist at Commerzbank in Frankfurt. "I don't see any significant recovery of the pound at this point because there are so many other risks apart from the fundamental ones including the upcoming EU summit. We might get clarity on the vote's timing but not on its final outcome" she said.

The pound slipped one per cent last week to 77.66 pence per euro on Friday. Sterling fell 0.3 per cent in the week to $1.4467.

Britain's uneven recovery and risk of a possible exit from the world's largest trading bloc have prompted investors to become more bearish on the pound this year with money markets pushing back the prospect of an interest rate increase by the Bank of England.