Pound Approaches Two-Year High as Construction Grows; Gilts Rise

The pound strengthened toward a two-year high against the dollar after U.K. construction activity expanded at its fastest pace in more than six years in November amid a revival in the housing market.

Sterling advanced for the fifth time in six days versus the U.S. currency amid speculation the Bank of England is moving closer to raising interest rates as the recovery gains momentum. The central bank, which meets this week, said in its quarterly Inflation Report last month it may boost borrowing costs in the third quarter of 2015 instead of the second quarter of 2016. U.K. government bonds rose with Treasuries and German bunds.