The pound reached the strongest level in nine weeks against the euro
before the Bank of England announces its monetary policy decision tomorrow.
The U.K. currency was about 0.1 percent from the highest since August
2009 versus the dollar amid speculation an improving economy will spur the
central bank to increase interest rates sooner than it currently predicts. Bank
of England governor Mark Carney said last week borrowing costs may remain low
due to slack in the labor market. U.K. government bonds were little changed.
The decision will be the first since the jobless
rate dropped enough to void Carney’s initial commitment on
borrowing costs. Even with unemployment falling, he has pushed back against
expectations of an imminent rate increase, saying more spare capacity needs to
be absorbed before policy makers can remove stimulus.
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