U.K. Pound Headed for Weekly Advance on Bets BOE Will Raise Interest Rates

(Bloomberg) -- The pound headed for a second weekly gain versus the dollar as signs U.K. inflation is quickening prompted investors to raise bets the Bank of England will lift interest rates twice more this year.

The U.K. currency reached $2 this week for the first time since 1992 when George Soros and other speculators forced it out of the European system of linked exchanged rates. Government reports showed rising inflation, which climbed to the highest in a decade last month, might be feeding into wage negotiation.


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Pound Declines Below $2 on Concern Gains Too Rapid, Carry Trade Unwinding

(Bloomberg) -- The British pound fell below $2 after pushing above that level on April 17 for the first time in 15 years.

Against the dollar, the pound was trading at $1.9994 as of 7:53 a.m. in London, from $2.0086 late yesterday, when it reached $2.0133, the strongest since June 1981.


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U.K. Stocks Pay Europe's Highest Dividends, Fail to Lure Buyers

Stock investors who hunt for high yields in Europe are looking everywhere except the U.K., where companies pay the biggest dividends in the world's major markets.

Britain's FTSE 100 Index is lagging behind the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, for a third year. The pound's 13 percent rally against the dollar in the past 12 months and rising interest rates are weighing on earnings and share prices.

The slowdown in profit growth is enough to deter money managers even though FTSE 100 companies' dividend payments relative to share prices are 16 percent higher than those in the 13 countries sharing the euro, according to data compiled by Bloomberg. Dividends for the FTSE 100 are two-thirds more than those of the Dow Jones Industrial Average in the U.S. and are almost quadruple those of Japan's Nikkei-225 Stock Average

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