The pound rose against the euro after Bank of England policy makers kept interest rates unchanged and decided against boosting asset purchases to safeguard economic growth. Sterling strengthened against 13 of its 16 major counterparts. Policy makers’ decision to keep the rate at 0.5 percent was predicted by all 57 economists in a Bloomberg survey. All but one analyst in a separate survey said the central bank would maintain so-called quantitative easing at 200 billion pounds ($318 billion). “The Bank of England will be watching data closely and leave it at least another month before there’s another bout of quantitative easing,” Harry Adams, a currency trader at Schneider Foreign Exchange in London, said before the decision. “I can see it coming in October maybe, but more likely in November.” Sterling appreciated 0.4 percent to 87.84 pence per euro at 12:02 p.m. in London, after slipping 0.4 percent yesterday. The pound was little changed at $1.5992 after earlier falling to $1.5913, the weakest level since July 13. U.K. two-year government notes were little changed at a yield of 0.57 percent. Ten-year yields fell two basis points to 2.32 percent. They dropped to a record 2.237 percent on Aug. 18. Gilts have returned 2 percent this month, compared with 1.8 percent for German government bonds and 0.8 percent for U.S. Treasuries, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. The securities outperformed as data added to evidence the recovery is floundering. The central bank stopped buying securities in early 2010 as the economy emerged from recession. While Adam Posen has been the only policy maker to vote for further purchases, the darkening economic outlook prompted Spencer Dale and Martin Weale last month to end their push for an increase in rates. The pound has depreciated 7.4 percent in the past 12 months against a basket of nine major peers, making it the second-worst performer after the dollar, according to Bloomberg Correlation- Weighted Currency Indexes. To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net. To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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