By Anchalee Worrachate
Feb. 3 (Bloomberg) -- The pound fell against the euro for a second day on speculation a report on U.K. construction will fuel the Bank of England’s need to cut interest rates.
The British currency was also little changed versus the dollar before economic surveys this week that may show house prices, consumer confidence and manufacturing production fell while factories raised prices at the slowest pace in at least a year. The Bank of England will cut its benchmark rate by 50 basis points to an unprecedented low of 1 percent on Feb. 5, according to a Bloomberg News survey of 61 economists.
“The pound is still under a lot of pressure,” said Ian Stannard, a currency strategist in London at BNP Paribas SA. “The economic outlook is not supportive of the currency.”
The pound weakened to 90.17 pence per euro as of 8:36 a.m. in London, from 90.02 pence. It was at $1.4257 from $1.4264.
Vodafone Group Plc, the world’s largest mobile-phone company, said today sales rose 14 percent in the third quarter, partly helped by the pound’s decline.
Two-year gilts fell before a sale of 3.75 billion pounds of 3.5 percent securities due 2011, part of a record 146.4 billion pounds of bonds the government plans to issue in the fiscal year ending March 31.
The yield on the two-year note climbed two basis points to 1.52 percent. The 10-year yield held at 3.69 percent.
To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net
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