The pound dropped after the Treasury said it will sell a record amount of gilts this year as Prime Minister Gordon Brown attempts to lift the economy out of its worst recession since World War II. The British currency slid versus the dollar, euro, yen and Swiss franc after the London-based Debt Management Office said it plans to raise 220 billion pounds ($319 billion) from gilt sales in the year through March 2010, higher than the 180 billion pounds forecast. Chancellor of the Exchequer Alistair Darling, who presented his budget to Parliament today, predicted a 3.5 percent contraction in the economy this year. “The U.K. is mortgaged up to the hilt,” said Paul Day, chief market analyst at MIG Investments SA in Singapore. Of the leading economies, “sterling is way off its lows against many currencies. The risk is we’ll take those lows out over the next couple of months.” The pound fell to $1.4460 by 1:52 p.m. in London, from $1.4673 yesterday. It weakened to 89.54 pence per euro, from 88.25 pence. The government will borrow 269 billion pounds ($392 billion) more than previously forecast to revive the economy, Darling said. The number of Britons without work rose to 2.1 million in the three months through February, the most in 12 years, a report by the International Labour Organization showed. The U.K. Treasury’s deficits will total 703 billion pounds during the five fiscal years through April 2014, up from the 434 billion pounds forecast in November, Darling said. The yield on the 10-year gilt rose 12 basis points to 3.42 percent. The 4.5 percent security due March 2019 fell 1.03, or 10.3 pounds per 1,000-pound ($1,462) face amount, to 108.94. The two-year gilt yield climbed three basis points to 1.46 percent. Bond yields move inversely to prices.

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