The pound gained for a third day versus the euro after Standard & Poor’s yesterday cut Spain’s sovereign-debt rating, citing mounting economic and political risks as the Spanish government considers a second bailout. Sterling was little changed against the dollar. Spain’s credit ranking was lowered two levels to BBB- from BBB+, with a negative outlook to the nation’s long-term rating, New York- based S&P said in a statement. The U.K. Debt Management Office is scheduled to sell 1.5 billion pounds ($2.4 billion) of inflation-linked gilts due in 2024 later today. The pound strengthened 0.1 percent to 80.34 pence per euro as of 7:49 a.m. London time. It gained 0.6 percent in the past two days after reaching 81 pence on Oct. 9, the weakest level since Sept. 17. Sterling traded at $1.6000, after dropping to $1.5977 yesterday, matching the lowest since Sept. 10. The pound has strengthened 0.4 percent in the past six months, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market currencies. The euro fell 2.5 percent and the dollar weakened 0.3 percent. Gilts returned 2.9 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bonds gained 3.1 percent and U.S. Treasuries rose 2.1 percent. To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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