The pound weakened against the dollar before a decision by Bank of England policy makers on interest rates. Sterling appreciated versus the euro after Spain’s credit rating was downgraded by Moody’s Investors Service. The central bank will hold the U.K.’s benchmark interest rate at a record low of 0.5 percent, according to all 61 economists in a Bloomberg News survey. It will maintain its asset-purchase program at 200 billion pounds ($323 billion), a separate survey shows. “A near-term hike by the BOE is priced in,” Geoffrey Yu, a currency strategist at UBS AG in London said in a Bloomberg interview conducted yesterday. “If they signal further hawkishness then maybe sterling will continue to rally.” Yu expects the central bank to raise rates in May. The pound fell 0.3 percent to $1.6151 as of 7:34 a.m. in London. It appreciated 0.3 percent to 85.87 pence per euro. Details of the policy makers’ deliberations will be released on March 23, when the minutes of the two-day meeting are published. Three of the nine-member Monetary Policy Committee voted to raise the benchmark interest rate to tame inflation at last month’s meeting. U.K. interest rates will rise by 25 basis points in June, according to sterling overnight interest average forwards data from Tullett Prebon Plc. Britain’s currency has gained 3.5 percent against the dollar this year amid mounting pressure on the Bank of England to raise its key rate as inflation persists above its target. Consumer-price growth accelerated to 4 percent last month, a Feb. 15 report showed, the 14th consecutive month that it remained above the 2 percent goal. To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net. To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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