By Morwenna Coniam Sept. 23 (Bloomberg) -- The pound rose versus the euro and the dollar after a report showed Bank of England Governor Mervyn King and David Miles joined a unanimous vote at the last policy meeting to suspend increases in the bank’s asset- purchase plan. Sterling strengthened below 90 pence per euro for the first time in three days after King and Miles switched sides and argued for consensus on the 175 billion-pound ($286 billion) program. All nine members of the Monetary Policy Committee opted to keep the interest rate at 0.5 percent, minutes of the Sept. 10 decision released by the central bank today in London showed. “It’s obviously a positive result for sterling,” said Geoffrey Yu, a currency strategist in London at UBS AG. “King has backed down a bit now and they have a better outlook for the economy which is better for the pound.” The pound rose 0.6 percent to 89.91 pence per euro as of 11:56 a.m. in London. It climbed 0.5 percent to $1.6439. “In the absence of significant news about the medium term, the case for adjusting the program now was outweighed by the benefits of following through with the program” announced in August, the bank said in the minutes. Policy makers noted that prices of assets including housing and equities had risen, and the short-term risks to economic growth had lessened. The yield on the 10-year gilt climbed 2 basis points to 3.78 percent. The two-year yield climbed 3 basis points to 0.87 percent. The difference in yield, or spread, between the two securities was at 289 basis points, within 3 basis points of the widest since at least January 1992.

Source