The pound rose for a third day versus the dollar before a report economists said will show a gauge of U.K. services output stayed near the highest level in more than six years in August. Sterling approached a three-month high against the euro. Markit Economics and the Chartered Institute of Purchasing and Supply will say its U.K. services index, based on a survey of purchasing managers, was at 59.7 last month from 60.2 in July, according to the median of 26 estimates in a Bloomberg News survey. The July reading was the highest since December, 2006. Bank of England policy makers start a two-day meeting today. The pound rose 0.1 percent at $1.5578 as of 8:54 a.m. London time after gaining 0.4 percent in the previous two days. Sterling appreciated 0.2 percent to 84.53 pence per euro after reaching 84.46 pence yesterday, the strongest since May 21. The Bank of England’s nine-member Monetary Policy Committee will keep its asset-purchase target at 375 billion pounds tomorrow, according to all 38 economists in a Bloomberg survey. Officials will hold the main interest rate at a record-low 0.5 percent as they assess the impact of forward guidance, a separate survey showed. The pound strengthened 6.2 percent in the past six months, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro gained 4 percent and the dollar climbed 2.7 percent. The 10-year gilt yield was little changed at 2.87 percent, after reaching 2.90 percent yesterday, the highest since Aug. 1. The price of the 2.25 percent bond maturing in September 2023 was at 94.66. Gilts lost 4.2 percent this year through yesterday, according to Bloomberg World Bond Indexes. German bonds dropped 2.6 percent and Treasuries declined 3.6 percent. To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

Source