The pound strengthened against the euro for a fourth day before a report expected to show factory output grew, even as policy makers are expected to keep the Bank of England’s key interest rate at a record low. Yields on 10-year gilts rose for the first time in four days. The central bank’s nine-member Monetary Policy Committee, led by Governor Mervyn King, will leave its main rate unchanged at 0.5 percent, according to all 51 analysts surveyed by Bloomberg. U.K. industrial production rose the most in more than a year in May, a separate survey forecasts. “The pound could gain modest support from the industrial production report for May should it reveal that activity rebounded following holiday and weather-related weakness in April,” Lee Hardman, a currency strategist at Bank of Tokyo- Mitsubishi UFJ Ltd. in London, wrote in a research note. The pound traded at 89.34 pence per euro, from 89.47 pence yesterday and was little changed at $1.5993 as of 9:13 a.m. in London. It bought 129.46 yen, from 129.50 yen. The yield on the 10-year gilt increased two basis points to 3.27 percent, while that on the two-year note was little changed at 0.80 percent. Industrial output probably rose 1.1 percent in May after contracting 1.7 percent in April, according to the median forecast of economists in a Bloomberg survey. Britain’s central bank is expected to keep its bond- purchase plan at 200 billion pounds today, according to a poll of 32 economists. To contact the reporter on this story: Garth Theunissen in London at gtheunissen@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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