The pound weakened for the first time in three days against the euro before the Bank of England releases the minutes of its last policy meeting and Chancellor of the Exchequer George Osborne delivers his annual budget. Sterling slipped from the strongest level in five weeks versus the 17-nation currency even as Cyprus’s parliament rejected a proposed levy on bank deposits formulated by European Union ministers seeking to rescue the nation from a banking crisis. Osborne will unveil his budget for the fiscal year ending March 2014 amid speculation he will loosen the central bank’s mandate on inflation targets. Gilts fell, with 10-year yields rising for the first time in five days. “There’s a lot of event risk for sterling this morning,� said Paul Robson, a senior currency strategist at Royal Bank of Scotland Group Plc in London. Osborne may announce “a review of the mandate. The markets are prepared for something more significant. Therefore sterling may actually give back any losses it sees running up to the budget.� Sterling slipped 0.5 percent to 85.76 pence per euro at 9:22 a.m. London time, after appreciating yesterday to 85.05 pence, the strongest level since Feb. 11. The pound fell 0.4 percent to $1.5033, the third day of declines. The Bank of England is due to release the minutes of its March 7 meeting in which it is expected to detail policy makers’ opinions on expanding a program of asset purchases to boost the economy. QE Vote Governor Mervyn King, Paul Fisher and David Miles voted to increase the so-called quantitative easing target by 25 billion pounds to 400 billion pounds on Feb. 7, according to the minutes of that meeting released on Feb. 20. Officials said then they “stand ready� to increase the program. Sterling has weakened 7.5 percent against the greenback this year amid speculation the Bank of England will boost asset purchases to revive the economy and counter the impact of Osborne’s austerity measures. The central bank last increased the target in July, boosting it by 50 billion pounds to 375 billion pounds. After Osborne’s budget speech, the Debt Management Office will announce funding needs for the next fiscal year. The median forecast from 19 of 21 primary dealers that trade directly with the debt agency was 161 billion pounds in a Bloomberg News survey, down from 164.2 billion pounds planned for the current fiscal year. Jobless Claims Gilts slipped before a government report today is forecast to show the number of Britons claiming unemployment benefits declined last month, supporting the argument that the economic recovery is gathering enough strength to make more stimulus from the Bank of England unnecessary. Claims fell 5,000 last month, following a 12,500 decline in January, the Office for National Statistics in London will say today, according to the median estimate of 27 economists in a Bloomberg survey. Ten-year gilt yields rose two basis points, or 0.02 percentage point to 1.85 percent after falling 14 basis points in the previous four days. The 1.75 percent bond due September 2022 gained 0.13, or 1.30 pounds per 1,000-pound face amount, to 99.15. U.K. government bonds returned 1.2 percent this month through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. German bunds rose 0.7 percent, while Treasuries lost 0.1 percent. To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net.

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