Pound Tumbles on Bank of England Inflation Report

The pound fell for a third day against the euro, dropping toward a 15-month low, after Bank of England Governor Mervyn King said U.K. growth is likely to be weak and the economy faces “big challenges.”

Sterling tumbled at least 0.5 percent versus all of its 16 major counterparts as King said at a press conference in London that there were “limits” to what policy makers could achieve. U.K. government bonds fell, with 10-year yields rising by the most in six weeks, as the central bank said inflation will remain above its 2 percent target for the next two years even with weak growth.