Pound Rises to 26-Year High on Speculation Bank of England to Raise Rates

(Bloomberg) -- The pound rose to the highest in 26
years against the dollar on speculation the Bank of England will
raise interest rates at least once more this year.

The U.K. currency gained to the highest since May 1981 as
the highest benchmark yields of any Group of Seven nation lure
investors. Interest-rate futures trading shows investors are
betting on a quarter-point rate increase by the BOE to 6 percent
and have partly priced in a second shift this year. U.K. policy
makers meet on Aug. 2 to decide on benchmark borrowing costs.


Read more at Bloomberg Currencies News

U.K. Pound Rises to 26-Year High Against Dollar After June Inflation Data

(Bloomberg) -- The pound rose to a 26-year high
against the dollar after a report showed U.K. inflation exceeded
the Bank of England's 2 percent limit for a 14th month in June.

The U.K. currency posted its biggest gain in a week on
speculation the BOE will keep raising interest rates while the
Federal Reserve stays on hold, increasing the attraction of
pound-denominated assets. Investors raised bets on how high BOE
policy makers will lift borrowing costs following the release of
the inflation report, futures trading shows.


Read more at Bloomberg Currencies News

Yen Declines to a Record Low Against Euro on Difference in Interest Rates

(Bloomberg) -- The yen fell to an all-time low
against the euro and weakened versus the dollar as rising global
interest rates prompted Japanese investors to buy assets abroad.

The yen fell against all 16 of the most-actively traded
currencies as Japan's 0.5 percent interest rate, the lowest among
developed nations, encouraged investors to borrow in the country
and seek higher returns overseas in a practice known as the carry
trade. The Bank of England yesterday lifted borrowing costs to a
six-year high and the European Central Bank signaled it may raise
its interest rate as soon as September.


Read more at Bloomberg Currencies News

Pound May Fall Versus Dollar on Speculation U.K. Yield Advantage to Shrink

(Bloomberg) -- The pound may fall against the dollar
on speculation the yield advantage the U.K. has over the U.S.
will shrink further before the U.S. employment report.

The pound held above $2 yesterday, trading near its highest
in 26 years, after the Bank of England lifted interest rates. The
extra yield investors receive for holding 10-year gilts over
similar maturity Treasuries shrank to 38 basis points from 45
basis points on July 4 after private reports showed the U.S.
added more jobs in May than forecast and services industries
growth unexpectedly quickened.


Read more at Bloomberg Currencies News

TREASURIES-Bonds fall on stronger services, ADP jobs data

(Reuters) - NEW YORK, July 5 - U.S. Treasury debt prices fell
on Thursday after stronger-than-expected data on jobs and the
services sector suggested to investors the Federal Reserve will
not move to cut official interest rates any time soon.




Bonds got off to a rocky start, following euro zone debt
down before the European Central Bank left rates on hold at 4
percent, as expected, but also signaled a September increase is
likely. In Britain, the Bank of England raised rates by 25
basis points to a six-year high of 5.75 percent.


Read more at Reuters.com Bonds News

U.K. Pound Trades Near 26-Year High Against Dollar on Interest Rate Views

(Bloomberg) -- The pound traded near its highest in
26 years against the dollar on expectations the Bank of England
will raise interest rates this week and signal further increases
may be needed to cool economic growth and inflation.

The U.K. currency gained to as high as $2.0196 today, the
strongest since June 2, 1981. BOE policy makers will lift
benchmark rates a quarter percentage point to 5.75 percent on
July 5, according to economists surveyed by Bloomberg News.
Governor Mervyn King told U.K. lawmakers in London last month
that the risk of inflation ``remains to the upside.''


Read more at Bloomberg Currencies News

Dollar Near Record Low Against Euro on Diverging Interest Rate Outlooks

(Bloomberg) -- The dollar traded near a record low
against the euro and the least in 26 years versus the British
pound as investors favor currencies of countries where interest
rates are more likely to rise.

The dollar has slid against nine of the 10 most-traded
currencies since June 28 when the Federal Reserve kept its
borrowing costs unchanged for an eighth straight meeting. The
Bank of England is forecast to raise rates while the European
Central Bank may signal increases on July 5.


Read more at Bloomberg Currencies News

Pound Rises to 26-Year High Against Dollar as Rate Advantage Set to Widen

(Bloomberg) -- The U.K. pound rose to a 26-year high
against the dollar on expectations the Bank of England will keep
raising interest rates, boosting the country's yield advantage.

The pound climbed the most against the dollar in a month
before a central bank meeting this week at which policy makers
are forecast to raise rates a quarter-point to a six-year high
of 5.75 percent. In contrast, the U.S. Federal Reserve held its
benchmark borrowing cost at 5.25 percent last week.


Read more at Bloomberg Currencies News

Yen stays weak, tankan bolsters BOJ rate view

(Reuters) - The yen fell against the dollar and euro after the BOJ's quarterly tankan poll came in line with forecasts, but trimmed losses as investors were careful about selling the yen too much ahead of a holiday-shortened week in the United States.




Sterling hit a 2 1/2-month high versus the dollar at $2.01, inching near a 26-year high before the Bank of England holds a policy meeting later in the week, when it is expected to lift rates by 25 basis points to 5.75 percent.


Read more at Reuters.com Hot Stocks News

Pound Gains Above $2 on View King Will Signal Need to Lift Interest Rates

(Bloomberg) -- The pound rose above $2 as signs U.K.
house-price growth quickened spurred speculation Bank of England
Governor Mervyn King will tell lawmakers it needs to resume
raising interest rates to push inflation back below its target.

The pound rose above $2 for a third time this week after the
Nationwide Building Society said U.K. property-price inflation
accelerated to a 2 1/2-year high. King, who's due to testify
before Parliament today, was among the policy makers who backed
higher rates at the BOE's last meeting. The majority decided to
keep rates unchanged.


Read more at Bloomberg Currencies News

U.K. Pound May Extend Gains; King Expected to Signal Need for Higher Rates

(Bloomberg) -- The U.K. pound may gain on
speculation Bank of England Governor Mervyn King will tell
lawmakers the central bank needs to resume raising interest rates
to push inflation back below its target.

The pound climbed above $2 per dollar for the first time
since May 2 this week as investors raised bets the central bank
will lift borrowing costs that are already the highest in the
Group of 7 nations. King, who's due to testify before Parliament
today, was among the policy makers who backed higher rates at the
BOE's last meeting. The majority decided to keep rates unchanged.


Read more at Bloomberg Currencies News

Bank of England Struggles to Retain Economists Lured by Big City Bonuses

(Bloomberg) -- The Bank of England's governing board
said it's concerned about an exodus of economists, who were lured
by higher pay in London's financial services industry last year.

``There has been some concern that the implementation of
changes to the staff mix in the monetary analysis and financial
stability areas has been adversely affected by a higher rate of
resignation and vacancies in the past year,'' the U.K. central
bank's directors said in its annual report, published yesterday.


Read more at Bloomberg Exclusive News

U.K. Pound Falls Against Dollar, Euro on View Yesterday's Rally Excessive

(Bloomberg) -- The U.K. pound declined against the
dollar as traders judged its rise to an eight-week high yesterday
was excessive.

The pound broke through the $2 barrier yesterday for the
first time since May 2 as investors bet Bank of England Governor
Mervyn King will this week tell lawmakers interest rates need to
rise further to cap inflation. Futures traders have raised bets
the U.K. currency will rise, pushing so-called net long positions
to a four-month high.


Read more at Bloomberg Currencies News

Bank of England Talks to Banks to Eradicate `Scruffy' Notes, Cashier Says

(Bloomberg) -- The Bank of England is in talks with
U.K. lenders, including HSBC Holdings Plc, to replace ``scruffy''
five-pound ($10) notes in circulation with a billion pounds of
new bills, its chief cashier said.

``We're in close contact with the issuing banks,'' said
Andrew Bailey, whose signature appears on every bill printed by
the central bank, in an interview. ``We will look at the way in
which banks are remunerated for sorting and issuing notes,
whether we've got the distribution of those incentives right
between the denominations of notes. On the face of it I think we
haven't.''


Read more at Bloomberg Bonds News

Banks, commodities boost FTSE amid global rally

(Reuters) - The UK's leading share index advanced on Wednesday, as commodities and banks helped European stocks keep up with a global rally and as the market shrugged off minutes from the Bank of England's June meeting.

Financial stocks extended their overnight gains on Wall Street, with Man Group, the world's largest listed hedge-fund company rising 1.9 percent.


Read more at Reuters Africa

U.K. Pound Stays Lower as Bank Keeps Benchmark Interest Rate Unchanged

(Bloomberg) -- The pound stayed lower against the
dollar after the Bank of England kept its benchmark interest rate
unchanged at a six-year high as predicted by most economists.

The nine-member Monetary Policy Committee, led by Governor
Mervyn King, kept the Bank Rate at 5.5 percent today, as predicted
by 58 of 62 economists in a Bloomberg News survey. The pound has
risen this year after two surprise increases in rates and a report
showing inflation at a decade high of 3.1 percent.


Read more at Bloomberg Currencies News

Treasuries Decline; Yield Reaches 5 Percent for First Time Since August

(Bloomberg) -- U.S. Treasuries fell, pushing the 10-
year yield above 5 percent for the first time since August, as
traders added to bets interest rates will rise around the world.

Two-year yields also gained after New Zealand policy makers
unexpectedly raised rates today and the European Central Bank
lifted its benchmark to a six-year high yesterday. Futures
traders added to wagers today on further increases by the ECB
and the Bank of England, and reduced bets the Federal Reserve
will need to lower borrowing this year to fuel economic growth.


Read more at Bloomberg Bonds News

Bank of England Will Probably Keep Rate Unchanged, Raise Again by August

(Bloomberg) -- The Bank of England will probably
leave its benchmark interest rate unchanged at a six-year high
today, as it assesses whether four previous increases are enough
to bring down inflation, a survey of economists shows.

The nine-member Monetary Policy Committee will keep the Bank
Rate at 5.5 percent at noon today after raising it to the highest
since April 2001 last month, according to 58 out of 62 economists
in a Bloomberg News survey. The bank will increase the rate a
quarter-point by its August meeting, a separate survey shows.


Read more at Bloomberg Bonds News

U.K. Pound Is Little Changed Amid Speculation Rate Increases Are Hurting

(Bloomberg) -- The U.K. pound was little changed amid
speculation four interest-rate increases since August are starting
to take effect in Europe's second-largest economy.

The currency logged a weekly drop versus the dollar and the
euro last week after reports signaled a cooling in Britain's
property market. A separate report later today may show U.K.
construction contracted in May. Bank of England policy makers also
announce their monthly decision on interest rates this week.


Read more at Bloomberg Currencies News

U.K. Pound Records Weekly Drop Versus Euro as House Price Inflation Cools

(Bloomberg) -- The pound logged a weekly drop against
the euro and the dollar on indications four interest-rate
increases in the past year are starting to cool Britain's
residential property market.

The U.K. currency also slid to near a week-low versus the
dollar after reports this week showed the number of loans granted
for house purchases fell in April and credit growth slowed. The
pound gained versus the euro in May, snapping a three-month losing
streak, amid data showing the economy maintained momentum in the
first quarter even after three interest-rate increases since
August by the Bank of England.


Read more at Bloomberg Currencies News