Pound Weakens as Traders Scale Back Rate Bets on Growth Concern

The pound weakened against most of its major peers this week as signs the U.K. economic recovery is faltering heightened speculation that the Bank of England won’t raise interest rates anytime soon.

Sterling depreciated more than 1 percent against the dollar and also fell versus the yen. Risks to economic growth remain “skewed to the downside,” the central bank said in its quarterly inflation report. Price growth may quicken to 5 percent this year, it said. Statistics this week also showed U.K. industrial and manufacturing production increased by less than economist forecasts. Traders scaled back bets on when policy makers will boost borrowing costs.