Pound Weakens on Housing, Trade Data as BOE Holds Rate

[link to mobile.businessweek.com]
The pound fell against the dollar as Bank of England policy makers kept interest rates at a record low, and after data showed London house prices rose at their slowest pace in 15 months as the U.K.’s trade deficit grew.
Sterling slid against all but three of 16 major peers as Associated British Foods Plc and Burberry Group Plc (BRBY) said that the past year’s best-performing major currency is cramping growth. The 10-year gilt yield dropped to a five-week low as banking woes in Portugal rekindled the specter of euro-area financial instability, boosting demand for the safety of U.K. debt. All 47 economists surveyed by Bloomberg predicted the BOE’s would leave its benchmark rate at 0.5 percent.
“We saw more evidence today that activity in the U.K. housing market appears to be easing off and also the trade report showed recent deterioration in the trade deficit has continued,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “Both of those factors are weighing modestly on the pound.”

More in link