BLBG:Pound Weakens Versus Dollar as BCC Says Economy is Fragile, Stocks Decline
The pound fell against the dollar as a business lobby group said the U.K.’s recovery is fragile and vulnerable to a global slowdown, strengthening the case for the central bank to keep interest rates at a record low.
Sterling weakened against most of its 16 major peers tracked by Bloomberg. The U.K.’s gross domestic product probably grew 0.3 percent in the three months through June, the British Chambers of Commerce’s quarterly survey of companies showed today. Retail sales fell by 1.4 percent in June, the British Retail Consortium will say tomorrow, according to the median estimate of six economists in a Bloomberg survey. The FTSE 100 Index lost 0.2 percent.
“The pound will stay weak,” said Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “The market is factoring out any chance of monetary tightening in the short term. That should keep sterling on a weak footing.”
The pound fell 0.6 percent to $1.5966 as of 9:20 a.m. in London. It weakened 0.4 percent to 128.95 yen and was 0.2 percent stronger at 88.66 pence per euro.
U.K. government bonds rose, with the 10-year gilt yield falling four basis points to 3.15 percent. Yields on two-year notes fell three basis points to 0.73 percent.
To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
