The pound fell from a one-week high against the dollar after a government report showed annual economic growth was less than earlier estimated, damping optimism the U.K. recovery is gathering momentum. Sterling dropped versus 12 of its 16 major counterparts after separate data showed Britain’s current-account deficit increased in the first quarter to the widest since at least 1955. The U.K. currency has strengthened versus all its peers during the past six months. U.K. government bonds rose, pushing benchmark 10-year yields to the lowest level this month. “Growth numbers came in a bit softer year-on-year and what really sticks out is the current-account data,� said Ned Rumpeltin, head of Group-of-10 currency strategy at Standard Chartered Bank in London. “The market went into these numbers long and a little bit complacent so we’re seeing reaction in positioning.� A long position is a bet an asset will rise. The pound dropped 0.2 percent to $1.6052 at 11:08 a.m. London time after climbing to $1.6096, the highest level since Sept. 19. The U.K. currency was little changed at 84.09 pence per euro after appreciating to 83.53 pence on Sept. 18, the strongest since Jan. 17. Sterling has advanced 6.4 percent in the past six months, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro gained 5.4 percent, while the dollar weakened 0.1 percent. GDP Report Britain’s gross domestic product increased 1.3 percent in the second quarter from a year earlier, the Office for National Statistics said in London, compared with an initial reading of 1.5 percent. The current-account deficit narrowed to 13 billion pounds in the second quarter while the figure for the previous three months was revised up to 21.8 billion pounds from an earlier estimate of 14.5 billion pounds, the statistics office said. Business investment dropped 2.7 percent in the second quarter and was down 8.5 percent from a year earlier, separate data showed. The benchmark 10-year gilt yield dropped three basis points, or 0.03 percentage point, to 2.73 percent after declining to 2.72 percent, the lowest level since Aug. 27. The 2.25 percent bond due in September 2023 rose 0.255, or 2.25 pounds per 1,000-pound face amount, to 95.875. Gilts lost 3.4 percent this year through yesterday, according to Bloomberg World Bond Indexes. German securities dropped 1.7 percent and Treasuries fell 2.4 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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