Pound Drops Before Osborne Presents Budget, BOE Releases Minutes
The pound slid for a third day against the euro before Chancellor of the Exchequer George Osborne presents a budget that analysts said will increase annual gilt sales to the second biggest amount on record.
The drop pushed sterling to its lowest level in more than a week against the 17-nation currency. The Bank of England is due to release the minutes of its March 8 policy meeting, when officials kept their bond-purchase plan at 325 billion pounds ($516 billion), after boosting it by 50 billion pounds the month before. The Treasury will sell 180 billion pounds of bonds next fiscal year, according to a Bloomberg survey of primary dealers that trade directly with the nation’s debt office.
The pound depreciated 0.2 percent to 83.51 pence per euro at 7:31 a.m. London time and reached 83.60 pence, the weakest level since March 13. The U.K. currency traded at $1.5878.
Bank of England Chief Economist Spencer Dale said yesterday that U.K. inflation may not slow as much this year as the central bank has forecast as tensions in the Middle East push up oil prices. The pound’s decline will aid the rebalancing of the British economy, he said in a speech in Aberystwyth, Wales.
The Office for National Statistics will release details of the U.K.’s net borrowing for February today.
Sterling has weakened 1.8 percent in the past year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The euro slid 5.5 percent in the same period.
Britain’s currency will end 2012 at 83 pence per euro and $1.57, according to Bloomberg surveys of analysts of strategists.
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