Pound May Fall as Traders Trim Bets Bank of England Will Raise Rates Again

(Bloomberg) -- The U.K. pound may fall as investors
lower expectations the Bank of England will raise interest rates
again this year.

Interest-rate futures trading shows investors have scaled
back their forecasts for how high the U.K. central bank will lift
rates on concern borrowing costs at a six-year high of 5.75
percent will begin to slow economic expansion. A report today may
show industrial production growth slowed in June.


Read more at Bloomberg Bonds News

Pound May Decline for Fourth Day Before Bank of England Mortgage Report

(Bloomberg) -- The pound may decline against the
dollar before a report that will probably add to evidence the
housing market is slowing after five interest-rate increases in a
year.

The currency may fall for a fourth day from near a 26-year
high versus the dollar before the Bank of England's mortgage
lending report, which is forecast to show approvals of loans for
home purchases dropped. The pound last week had its biggest
weekly decline against the yen since March as concern U.S.
subprime mortgage defaults will hamper global growth prompted
investors to sell higher-yielding assets.


Read more at Bloomberg Currencies News

Pound Falls to Lowest in Week as Report Shows House-Price Growth Stalled

(Bloomberg) -- The pound fell to the lowest in more
than a week after a report showed U.K. house-price growth almost
stalled in July, signaling five interest-rate increases in the
past year are beginning to bite.

The U.K. currency slid from near a 26-year high against the
dollar after Nationwide Building Society said house prices rose
0.1 percent from June, the slowest pace of growth in 15 months.
Bank of England Deputy Governor John Gieve said this week that
benchmark borrowing costs are probably ``restrictive'' at a six-
year high of 5.75 percent.


Read more at Bloomberg Currencies News

Pound Advances to Highest in 26 Years on U.K.'s Rate Advantage Over U.S.

(Bloomberg) -- The pound climbed to a 26-year high
against the dollar on speculation the Bank of England will lift
interest rates this year as losses on U.S. subprime mortgages
prompt the Federal Reserve to stay on hold.

The U.K. currency rose for a fourth day after Bear Stearns
Cos. reported losses on U.S. hedge funds that bet on bonds backed
by subprime mortgages. The BOE today released minutes of its July
5 meeting, showing policy makers voted 6-3 in favor of raising
rates to a six-year high. Inflation exceeded its 2 percent target
for a 14th month in June, a report showed yesterday.


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

U.K. Pound Declines Versus Euro, Dollar on Signs Property Boom is Cooling

(Bloomberg) -- The pound dropped against the euro
after an industry survey showed house prices in the U.K. rose at
the slowest pace since January 2006 last month, a sign higher
interest rates may be starting to cool the property-market boom.

The pound fell against 14 of the 16 most-traded currencies,
as investors reduced bets the Bank of England will raise rates to
6.25 percent this year. The U.K. currency also retreated from a
26-year high against the dollar as a technical indicator used by
traders to judge whether it's risen or fallen too far suggested
buying for this week had run its course.


Read more at Bloomberg Currencies News

U.K. Gilts Post Weekly Loss on Rates; Pound Stays Near Highest in 26 Years

(Bloomberg) -- U.K. bonds fell this week, pushing 10-
year yields to the highest in more than seven years, on
speculation the Bank of England will add to yesterday's interest-
rate increase in coming months to cool inflation.

The BOE raised rates for a fifth time in 12 months, to a
six-year high of 5.75 percent, and signaled further increases may
be needed. The central bank said inflation risks in the medium
term ``lie to the upside.'' The government said today factory
production rose in May to the highest in almost six years, a sign
rates aren't too high to support economic expansion.


Read more at Bloomberg Currencies News

Pound Falls Against Dollar as U.S. Services Growth Unexpectedly Quickens

(Bloomberg) -- The U.K. pound fell against the
dollar after a U.S. report showed growth in service industries
unexpectedly quickened to the fastest pace in 14 months.

The pound has climbed nearly 3 percent versus the dollar
this year on anticipation U.K. economic growth that's outpacing
the U.S. will prompt the Bank of England to keep raising
interest rates. Expansion in U.S. service businesses, which make
up almost 90 percent of the economy, adds to evidence growth
picked up last quarter.


Read more at Bloomberg Currencies News

U.K. Pound May Hold Near 26-Year High on Bets BOE Will Raise Interest Rate

(Bloomberg) -- The pound may hold near a 26-year high
against the dollar on speculation the Bank of England will lift
interest rates today and signal further increases are needed to
curb inflation.

The U.K. currency climbed to $2.0207 yesterday, the highest
since June 1981, and has held above $2 for the past five days.
BOE policy makers will increase their interest rate a quarter
percentage point to a six-year high of 5.75 percent today,
according to 53 of 60 economists surveyed by Bloomberg News.


Read more at Bloomberg Currencies News

Dollar Approaches All-Time Low Against the Euro on Interest-Rate Outlook

(Bloomberg) -- The dollar dropped to a 26-year low
versus the British pound and approached the weakest level against
the euro on speculation the Federal Reserve will keep borrowing
costs unchanged while other central banks extend their increases.

Investors sold the U.S. currency amid concern losses in the
subprime mortgage sector may weaken the housing market and spill
over into the broader economy, dimming the allure of U.S. assets.
The Bank of England is forecast to boost interest rates while the
European Central Bank may signal increases this week.


Read more at Bloomberg Currencies News

Bank of England Likely to Lift Key Interest Rate to 5.75 Percent This Week

(Bloomberg) -- Bank of England policy makers will
probably raise the benchmark interest rate for the fifth time in a
year this week as Governor Mervyn King wins more support for an
increase to curb inflation, a survey of economists shows.

The nine-member Monetary Policy Committee will lift the Bank
Rate to 5.75 percent, the highest since April 2001, according to
53 out of 60 economists in a Bloomberg News survey. The central
bank will announce the decision at noon in London on July 5 and
release minutes of its meeting on July 18.


Read more at Bloomberg Bonds News

Pound Heads for Sixth Quarterly Gain on View Rates Have Further to Rise

(Bloomberg) -- The pound headed for a quarterly
gain, its sixth in a row, after a rise in consumer and mortgage
lending supported the view that the Bank of England will keep
raising interest rates to curb inflation.

Data showed consumer credit growth almost doubled in May and
mortgage approvals unexpectedly rose to a three-month high,
suggesting the BOE must do more to cool price growth. Policy
makers next decide on interest rates on July 5, and economists
surveyed by Bloomberg News expect them to lift the main benchmark
a quarter-point to 5.75 percent.


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

Cocoa Declines in London as Pound's Rally Boosts Costs for Foreign Buyers

(Bloomberg) -- Cocoa fell in London after the U.K.
pound rose to the highest in four months against the euro,
making the ingredient used to make chocolate more expensive for
investors holding other currencies.

The pound gained on speculation the Bank of England, the
U.K.'s central bank, will add to four interest-rate increases
since August 2006 to contain inflation in Europe's second-
largest economy. The London cocoa contract, traded on the
Euronext.liffe exchange, is denominated in the U.K. currency.


Read more at Bloomberg Commodities News

Pound Advances After Minutes Show BOE's King Favored Higher Interest Rates

(Bloomberg) -- The U.K. pound rose to a two-week
high against the dollar after minutes of the Bank of England's
last policy meeting showed Governor Mervyn King and three other
policy committee members voted for higher interest rates.

King, John Gieve, Timothy Besley and Andrew Sentance argued
for a quarter-point move to 5.75 percent, minutes of the June 6-7
meeting published by the central bank today showed. Five members
voted for an unchanged stance. The U.K.'s lending rates are the
highest of the Group of 7 nations, helping to draw investments
and strengthen the pound.


Read more at Bloomberg Currencies News

Europe's Biggest Hedge Funds Form Committee to Consider Tighter Standards

(Bloomberg) -- Hedge funds may become more strict
in managing risks and valuing assets following recommendations
of a taskforce supported by many of Europe's largest funds.

Hedge funds including GLG Partners LP, Man Group Plc and
CQS U.K. LLP have enlisted Andrew Large, a former deputy
governor of the Bank of England, to chair a committee that will
assess the need to tighten regulations next year for the $1.6
trillion industry, according to a preliminary press statement
obtained by Bloomberg News.


Read more at Bloomberg Stocks News

U.K. Pound May Gain on Views Minutes, M4 to Back Higher Interest Rates

(Bloomberg) -- The pound may advance on speculation
the minutes of the Bank of England's June meeting and economic
reports this week will reinforce the case for higher interest
rates to slow the economy.

Since the June 7 meeting Governor Mervyn King and Paul
Tucker again expressed concern about inflation, underpinning
expectations for an increase in borrowing costs. The bank will
probably say June 20 that M4 money supply, closely watched by
rate setters for signs of inflation, rose for a third week.


Read more at Bloomberg Currencies News

Platinum Falls in London as Higher Rates May Slow Demand; Palladium Drops

(Bloomberg) -- Platinum fell for a fourth successive
day in London on speculation rising borrowing costs in Europe
will slow demand from car manufacturers. Palladium also dropped.

Europe was the biggest user of platinum last year, dominated
by demand from manufacturers of auto catalysts to reduce
pollution, according to London-based manufacturer Johnson Matthey
Plc. The European Central Bank, the Swiss National Bank and the
Bank of England have raised interest rates this year.


Read more at Bloomberg Commodities News