Bloomberg News

Pound Strengthens Against Dollar Before U.K. Inflation Data

June 14, 2011

June 14 (Bloomberg) -- The pound strengthened against the dollar before a report that’s forecast to show U.K. inflation stayed at the fastest since October 2008 in May.

U.K. government bonds declined. Consumer prices probably rose 4.5 percent for a second month, according to the median estimate of 30 economists in a Bloomberg News survey before the data. That’s more than twice the Bank of England’s 2 percent target. The central bank last week held its key rate at a record low 0.5 percent to bolster the recovery.

The pound rose 0.3 percent to $1.6430 at 8:25 a.m. in London. It was little changed against the euro at 87.95 pence.

The yield on the 10-year gilt rose four basis points to 3.29 percent. The two-year note yield gained three basis points to 0.88 percent.

The U.K. plans to auction 2.25 billion pounds ($3.7 billion) of debt maturing in 2027 tomorrow.

--Editors: Keith Campbell, Mark McCord.

To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net.

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.


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