U.K. Pound Holds Near 2-Month High Versus Dollar on Interest-Rate Outlook

(Bloomberg) -- The U.K. sterling traded near its
highest in two months after Bank of England policy maker John
Gieve indicated interest rates are still too low to curb credit
growth in Europe's second-biggest economy.

The U.K. currency broke through $2 for the second time in as
many days yesterday on views borrowing costs will rise further.
Gieve, who spoke late yesterday, joined BOE Governor Mervyn King
and two other members of the Monetary Policy Committee in voting
for a rate increase in June. They were outvoted by the other five
MPC members who favored holding rates at 5.5 percent.


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Pound Gains for First Week in Three Amid Speculation U.K. Rates Will Climb

(Bloomberg) -- The pound gained for the first week
in three on speculation the Bank of England will need to keep
raising interest rates to slow the economy.

BOE Governor Mervyn King this week said the bank ``may need
to take further action'' to contain inflation, a week after it
boosted the main lending rate to a six-year high. Monetary Policy
Committee member Paul Tucker said in a speech yesterday a pickup
in money growth is an ``amber light'' for future inflation.


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Bank of England's King Says May Need to Take `Further Action' on Inflation

(Bloomberg) -- Bank of England Governor Mervyn King
signaled U.K. interest rates may have to rise further from a six-
year high if measures of inflation pressures stay close to their
current levels.

``The Monetary Policy Committee will be watching closely
indicators of capacity pressures, pricing intentions and inflation
expectations,'' King said in a speech to business executives in
Cardiff, Wales, yesterday. ``If these indicators remain elevated,
the MPC may need to take further action.''


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U.K. Pound Declines After Bank of England Keeps Benchmark Rate Unchanged

(Bloomberg) -- The pound dropped against the dollar
and the euro after the Bank of England kept its benchmark interest
rate unchanged at a six-year high.

The nine-member Monetary Policy Committee, led by Governor
Mervyn King, kept the Bank Rate at 5.5 percent today, as predicted
by 58 of 62 economists in a Bloomberg News survey. The pound has
risen this year after two surprise increases in rates and a report
showing inflation at a decade high of 3.1 percent.


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U.K. Pound Climbs as Bank of England Minutes Signal Further Rate Increase

(Bloomberg) -- The pound advanced after minutes from
the Bank of England's last rate-setting meeting showed policy
makers voted unanimously to increase interest rates by a quarter
point this month.

The U.K. currency rebounded against the dollar and climbed
to a two-week high versus the euro as Monetary Policy Committee
members said in the minutes borrowing costs may need to rise
again. The central bank hinted at higher rates in its quarterly
inflation report last week as it seeks to get the pace of price
increases back toward its 2 percent target.


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