BLBG:Pound Reaches 2-Week High as Cameron Sees Improving U.K. Economy
The pound reached its strongest level in more than two weeks against the dollar as U.K. Prime Minister David Cameron said an improvement in the economy may allow the government to lower taxes.
Sterling was within 0.3 percent of its strongest level versus the euro since July 10. A report this week will show Britain’s economy expanded 0.6 percent in the second quarter, double the rate in the previous three months, according to the median prediction of 37 economists in a Bloomberg News survey. A strengthening economy may reduce the chances of Bank of England policy makers led by Governor Mark Carney boosting monetary stimulus that typically debases currencies.
The pound was little changed at $1.5288 as of 8:29 a.m. London time. The currency climbed to $1.5297 earlier today, the strongest level since July 3. Sterling was at 86.04 pence per euro after appreciating to 85.90 pence on July 19.
“As we start to see the economy grow stronger -- and it is growing stronger -- as we start to see the country improve, actually I want to give people back some of their hard-earned money and try to reduce their taxes,” Cameron said in an interview on BBC Television broadcast yesterday.
The pound has gained 1.9 percent in the past three months, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-market currencies. The euro strengthened 2.8 percent and the dollar climbed 2 percent.
U.K. government bonds handed investors a loss of 2.5 percent this year through July 19, according to Bloomberg World Bond Indexes. German bonds dropped 0.6 percent and Treasuries declined 2 percent.
To contact the reporters 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
