British pound falls as traders cut back on rate expectations


The British pound could fall further as investors lower expectations the Bank of England will raise interest rates again this year. The implied yield on the December interest-rate futures contract has fallen 10 basis points to 6.15 percent in the past two weeks.

Interest rate futures 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. The implied yield on the December interest-rate futures contract has fallen 10 basis points to 6.15 percent in the past two weeks. The contract settles to the three-month London inter-bank offered rate for the pound, which has averaged about 15 basis points more than the bank's key rate in the past decade.


TradingEconomics.com, Bloomberg, BoE
8/6/2007 6:09:43 AM