The pound fell for a second day versus the dollar, reaching an eight-month low, after the Federal Reserve said it would take steps to boost U.S. growth amid concern over a global economic slowdown. Gilts rose, pushing the two-year yield down to a record. The Fed said there are “significant downside risks” to the economic outlook and that it would buy longer-dated U.S. securities. The Debt Management Office is scheduled to sell 4.75 billion pounds ($7.4 billion) of 1.75 percent gilts due in January 2017. Sterling fell to $1.5448, the weakest since Jan. 7, before trading 0.2 percent weaker at $1.5470 at 8:45 a.m. in London. The pound was little changed at 87.56 pence per euro, and depreciated 0.1 percent to 118.46 yen. Sterling has fallen 4.6 percent in the past 12 months, the worst performer among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Currency Indexes. The British currency weakened against the dollar, euro and yen yesterday after Bank of England officials said they may need to buy more bonds to keep borrowing costs capped as the recovery falters. The two-year gilt yield dropped two basis points to 0.51 percent, after falling to 0.477 percent, the lowest since Bloomberg began collecting data on the securities in 1992. The 10-year gilt yield slid six basis points to 2.36 percent. To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net; Keith Jenkins in London at Kjenkins3@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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