Sept. 6 (Bloomberg) -- The pound weakened for a fifth straight day against the euro and gilts rose amid speculation signs of a slowing economy will prompt policy makers to consider increasing asset purchases at a central bank meeting this week. The pound fell against all 16 of its most-traded peers. Data today showed new car registrations fell 17.5 percent last month from a year earlier. The Halifax index of U.K. house prices may show a 0.5 percent decline in August when the report is published this week, according to a Bloomberg survey. Short- sterling futures rose as investors added to bets interest rates will stay lower for longer. “There is going to be some building momentum for the bank to at least discuss the prospect of coming back to the quantitative-easing agenda,” said Jeremy Stretch, global head of foreign-exchange strategy at Canadian Imperial Bank of Commerce’s CIBC World Markets unit in London. “Sterling may struggle a little bit as people reassess the durability of the U.K. recovery.” The pound depreciated 0.5 percent to 83.90 pence per euro, the weakest level since July 29, as of 11:45 a.m. in London. The run of five consecutive losses is the longest since the period through July 6. Sterling slid 0.6 percent to $1.5361. Data on Sept. 3 showed futures traders increased bets that sterling will drop against the dollar amid signs the U.K. economy is moderating following its fastest growth since 2001 in the second quarter. Figures last week showed a U.K. service- industry index at the lowest level since April 2009 in August, while growth in manufacturing and construction slowed. Net Shorts The difference in the number of wagers by hedge funds and other large speculators on a decline in the pound compared with those on a gain -- so-called net shorts -- was 15,266 on Aug. 31, compared with net shorts of 4,365 a week earlier, according to figures from the Washington-based Commodity Futures Trading Commission. Gilts rose for the first day in four, with the yield on the benchmark 10-year bond falling 3 basis points to 2.98 percent and the two-year note yield also dropping 3 basis points to 0.69 percent. “There is momentum in gilts still, and when you see the U.K. numbers starting to deteriorate you should see them performing well,” said Kenneth Broux, a senior market economist at Lloyds Banking Group Plc in London. Investors will focus on the prospects for more quantitative easing, he said. The yield on short-sterling futures for December 2011 fell 3 basis points to 1.78 percent. The Bank of England will keep its main interest rate at 0.50 percent and hold asset purchases at 200 billion pounds ($309 billion), according to Bloomberg surveys. U.K. factory production grew at a record pace in the third quarter on surging export demand, the Engineering Employers Federation said today. The number of manufacturers saying sales rose in the three months through September exceeded those reporting declines by 33 percent, compared with 30 percent in the second quarter, the EEF and accountancy firm BDO Stoy Hayward LLP said in a quarterly survey. That’s the highest since the report began in 1995. --With reporting by Scott Hamilton in London. Editors: Keith Campbell, Peter Branton. To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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