Oct. 7 (Bloomberg) -- The pound rose against the dollar after the Bank of England left interest rates at a record low and refrained from increasing its bond-buying program to stimulate the economy. The U.K. currency rebounded from near its weakest level since May against the euro. The central bank held the main rate at 0.5 percent, in line with the forecasts of all 60 economists surveyed by Bloomberg News. Policy maker Adam Posen last week advocated further asset purchases, or quantitative easing, saying monetary policy “should continue to be aggressive about promoting recovery.” He was backed by the British Chambers of Commerce and the Institute of Directors. “There has been a lot more dovish comments, notably by Posen, during the past month, the pound may therefore get a bit of support from no increase in quantitative easing,” Jane Foley, a senior currency strategist at Rabobank International in London, said before the decision. “The minutes of the meeting will be more interesting.” The pound strengthened 0.6 percent to $1.5995 as of 12:01 p.m. in London, from $1.5890 yesterday. Sterling was at 87.41 pence per euro, from 87.66 pence yesterday, after earlier weakening to 88.05 pence, the weakest level since May 7. The bank’s decision to hold its asset-purchase plan at 200 billion pounds ($318 billion) was predicted by 35 of 36 economists in a separate Bloomberg poll, with one forecasting a rise to 250 billion pounds. U.K. government bonds stayed lower, with the 10-year yield rising 3 basis points to 2.92 percent. The two-year yield also rose 3 basis points, to 0.65 percent. The pound declined 0.3 percent against the dollar and was little changed versus the euro after the central bank’s last policy decision on Sept. 9. The 10-year bond yield jumped 6 basis points that day.

Source