U.K. Gilts Show Inflation Outlook Highest Since ’08; Pound Falls
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U.K. inflation expectations climbed to a 4 1/2-year high amid speculation the Bank of England will add more stimulus, or quantitative easing, and sacrifice its 2 percent target to spur the economy.
The pound dropped to the lowest level against the dollar since June 2010 as data showed U.K. industrial and manufacturing production unexpectedly declined in January. Sterling weakened for a second day versus the euro. Gilts gained after the Royal Institution of Chartered Surveyors said house prices decreased in February. Two-year yields slid to the least since September.