The pound declined toward a three- week low against the euro before a report economists said will show the U.K.’s consumer-price inflation rate stayed above the Bank of England’s 2 percent target last month. Sterling was little changed against the dollar. The annual inflation rate was 2.8 percent in March, unchanged from the previous month, the Office for National Statistics in London will say today, according to the median estimate of 36 analysts in a Bloomberg News survey. Ten-year government bonds snapped a three-day advance. The pound slipped 0.2 percent to 85.44 pence per euro at 8:07 a.m. London time after depreciating to 85.60 pence on April 10, the weakest level since March 25. It traded at $1.5302. The 10-year government bond yield climbed one basis point to 1.72 percent. Inflation expectations were little changed after dropping for a third day yesterday, with the 10-year break-even rate, derived from the yield difference between gilts and index-linked securities, at 3.26 percentage points. The rate climbed to 3.39 percentage points on April 11, the most since September 2008. The Bank of England will release minutes of its April 3-4 policy meeting tomorrow. Sterling gained 1.1 percent in the past month, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The dollar lost 0.3 percent and the euro also weakened 0.3 percent. U.K. government bonds returned 1.5 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies, outperforming German bonds, which gained 0.8 percent, and Treasuries, which rose 0.9 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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