The pound rose for a fifth day versus the dollar before an industry report that economists said will show U.K. manufacturing output accelerated in November. Sterling strengthened to the highest level since August 2011 against the U.S. currency after separate data showed British house prices increased in all regions last month for the first time in more than six years. The pound advanced to the strongest level since January versus the euro. U.K. government bonds fell for a second day. “We should get a reasonably good PMI number,� said Peter Kinsella, a senior currency strategist at Commerzbank AG in London. “We’ve had a very good run in manufacturing PMIs in the last four months. You can’t expect it to stay at very elevated levels. So a little bit of pullback makes sense and indeed it’s expected.� Sterling gained 0.2 percent to $1.6394 at 9:20 a.m. London time after advancing to $1.6443, the highest since Aug. 29, 2011. The U.K. currency rose 0.3 percent to 82.81 pence per euro. An index of U.K. manufacturing based on a survey of purchasing managers climbed to 56.1 from 56 in October, according to a Bloomberg News survey before Markit Economics releases the figure today. A reading above 50 shows expansion. Home values across England and Wales increased 0.5 percent from October, property researcher Hometrack said today. The yield on 10-year gilts climbed six basis points, or 0.06 percentage point, to 2.83 percent. The 2.25 percent bond due September 2023 fell 0.525, or 5.25 pounds per 1,000-pound face amount, to 95.06. U.K. government securities handed investors a loss of 3.2 percent this year through Nov. 29, according to Bloomberg World Bond Indexes. German bonds fell 1 percent and U.S. Treasuries declined 2.3 percent. To contact the reporters on this story: Eshe Nelson in London at enelson32@bloomberg.net; David Goodman in London at dgoodman28@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

Source