The pound fell to its lowest level in a month versus the dollar on concern efforts to pull the U.K. from its first double-dip recession since the 1970s will be hampered by the euro-area crisis and declining global growth. Sterling slid for a third day against the U.S. currency after PricewaterhouseCoopers LLP said in a report that businesses should prepare for the possibility of a “prolonged recession� if Europe’s sovereign-debt turmoil worsens. Government 10-year bond yields fell to a six-week low. “Given the situation in Europe, the U.K. recession may not end until next year, and that is an optimistic scenario,� said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. “The pound will weaken alongside the euro, while the dollar is strengthening broadly as risk aversion is creeping back into the market.� The pound fell 0.2 percent to $1.5468 at 10:24 a.m. London time after weakening to $1.5448, the lowest level since June 8. Sterling was little changed at 78.99 pence per euro. It appreciated to 78.71 yesterday, the strongest since Nov. 3, 2008. The U.K. currency has gained 4 percent in the past year, the third-best performer after the yen and the dollar among the 10 developed-nation currencies tracked by Bloomberg Correlation- Weighted Indexes. The 10-year gilt yield was little changed at 1.55 percent, after sliding to 1.54 percent, the lowest since June 1. The 4 percent bond due in March 2022 traded at 121.82 percent of face value. The U.K. is scheduled to sell 3.5 billion pounds of bonds maturing in September 2022 at auction today. U.K. debt has returned 3.2 percent this year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bunds have gained 3.8 percent as U.S. Treasuries handed investors a profit of 2.5 percent. To contact the reporter on this story: Neal Armstrong in London at narmstrong8@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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