Pound Weakens to Two-Month Low as Inflation Slows; Gilts Advance
This article is for subscribers only.
The pound fell to a two-month low against the dollar after a government report showed U.K. inflation slowed more in October than economists forecast, damping bets the central bank will raise interest rates.
Sterling weakened for a third day versus the euro before the Bank of England led by Governor Mark Carney publishes new economic forecasts in its quarterly Inflation Report tomorrow. Policy makers have pledged to keep interest rates at a record low as long as inflation expectations remain anchored to their 2 percent goal. Short-sterling futures contracts advanced, a sign investors were paring bets on higher interbank borrowing costs. U.K. government bonds rose.