The pound fell against the euro for a second day on speculation the Bank of England may signal it’s considering more bond purchases to stimulate the economy when it publishes economic and inflation forecasts today. Sterling weakened versus most of its major peers, with the biggest declines against the higher-yielding New Zealand and Australian dollars. Britain’s currency was within a cent of a two-week low against the dollar after data showed U.K. jobless claims rose more than economists forecast in January. Bank of England Governor Mervyn King is scheduled to present the central bank’s outlook at 10:30 a.m. in London. “We are recommending clients to be short the pound before the inflation report,� said Sara Yates, a foreign-exchange strategist at Barclays Plc in London. The Bank of England may “leave the door open to a possible extension to quantitative easing in May. We expect Mervyn King to be dovish, stressing the risks, so we think sterling will underperform,� she said. A short position is a bet that an asset price will decline. The pound fell 0.4 percent against the euro to 83.99 pence at 9:56 a.m. in London, and was little changed at $1.5685, after dropping to $1.5645 yesterday, the least since Jan. 27. Sterling will depreciate to $1.55 over three months and to $1.52 over six months, Yates said. The pound has declined 1.9 percent this year according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. Over the past 12 months it has slid 5.4 percent, the indexes show. Jobless Claims The number of people claiming jobless benefits rose by 6,900 to 1.6 million, the highest level since January 2010, the Office for National Statistics said today. The median of 24 forecasts in a Bloomberg News Survey was for a gain of 3,000. U.K. unemployment measured by International Labour Organization methods jumped by 48,000 to 2.67 million in the fourth quarter, leaving the rate at 8.4 percent, the most since 1995. Ten-year gilts were little changed, leaving the yield at 2.09 percent. Thirty-year rates declined three basis points to 3.24 percent. The BOE announced an additional 50 billion-pound round of bond purchases, known as quantitative easing, on Feb. 9 after gross domestic product fell 0.2 percent in the fourth quarter. The Monetary Policy Committee kept its benchmark interest rate at a record-low 0.5 percent the same day. Gilts have lost 1.3 percent this year, after returning almost 17 percent in 2011, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German debt lost 0.4 percent, the indexes show. 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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