Pound Falls to 15-Month Low as Faltering Economy Curbs Rate Bets

The pound posted its biggest weekly decline in a month against the euro as signs that the U.K. economic recovery is faltering reduced the scope for interest-rate increases from the Bank of England.

Sterling fell versus 12 of its 16 major counterparts tracked by Bloomberg this week, losing most against the Swedish krona and sliding to a 15-month low versus the euro. Reports this week showed U.K. confidence fell and manufacturing growth unexpectedly slowed in June while a Credit Conditions Survey by the central bank predicted mortgage demand to drop in the third quarter. Bank of England policy maker Adam Posen said on June 27 that a call by the Bank for International Settlements for higher rates worldwide to curb inflation was “nonsense.”