The pound was little changed before a Bank of England rate-setting meeting at which policy makers are expected to hold borrowing costs at a six-year high.
The U.K. currency held near a three-week low against the dollar as investors shun high-yielding currencies on concern losses on U.S. subprime mortgages will damage global economic growth. The BOE is forecast to leave key rates at 5.75 percent, while interest-rate futures indicate it will raise borrowing costs a quarter percentage point by the end of this year.
``We had a few sluggish U.K. numbers over the last couple of weeks but that in itself won't upset the Bank of England,'' said Paul Robson, a currency strategist at Royal Bank of Scotland Group Plc in London. ``The BOE is widely expected to leave rates on hold.''
Against the euro, the pound traded at 67.29 pence as of 7:24 a.m. in London, from 67.25 late yesterday in New York, and at $2.0311, from $2.0325.
The U.K.'s largest mortgage lender HBOS Plc will release house-price data for July at 8 a.m. in London. Economists surveyed by Bloomberg News forecast the average value of a home rose 0.3 percent, from 0.4 percent the month before.
The implied yield on the December interest-rate futures contract was at 6.17 percent yesterday. 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.
U.K. bonds closed little changed yesterday. The yield on the 4 percent note maturing September 2016 was 5.20 percent.
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