The pound slumped against the dollar, euro and yen after the Bank of England reactivated its bond- purchase program and kept its benchmark interest rate at a record low to help revive the U.K.’s faltering economy. Sterling declined against all of its 16 major peers as Britain’s monetary policy makers boosted the central bank’s quantitative-easing program by 75 billion pounds ($115 billion) to 275 billion pounds. Eleven of 32 economists surveyed by Bloomberg before the decision predicted an increase in asset purchases of at least 50 billion pounds. The main rate was maintained at 0.5 percent, as predicted by all 53 economists in a separate survey. “It’s slightly bigger than we thought,” said John Hydeskov, chief analyst at Danske Bank A/S in London. “It’s definitely not good for the pound. We’re seeing a big weakening at the moment. I would say that this can continue to 87.50 pence.” The pound dropped 1 percent to $1.5302 at 12:05 p.m. in London. Sterling fell 0.9 percent to 87.08 pence per euro and was 1.2 percent weaker at 117.36 yen. The U.K. FTSE 100 Index of shares climbed 2.1 percent, while the Stoxx Europe 600 Index rose 1.6 percent. The Bank of England has faced pressure to embark on further quantitative easing to help revive an economy battling the steepest government spending cuts since World War II and the worsening euro-area debt crisis. The U.K economy grew less than economists forecast in the second quarter, expanding 0.1 percent from the previous three months, the Office for National Statistics said yesterday. That was lower than the 0.2 percent previously published and missed the 0.2 percent expansion forecast in a Bloomberg survey. 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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