Pound Falls, Gilts Gain as Growth Falters While Inflation Rises
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The pound posted weekly losses against most of its 16 most-actively traded peers as data showed the economy shrank and confidence plunged, fueling concern the government’s austerity measures are hurting growth.
The pound fell against the dollar for the first time in three weeks and declined against the euro for the fourth consecutive week on speculation the Bank of England may not be able to raise interest rates to fight inflation as growth slows. GfK NOP Ltd.’s index of sentiment fell 8 points from December to minus 29, the lowest since March 2009, data yesterday showed. The country’s gross domestic unexpectedly shrank 0.5 percent in the three months through December.