The pound rose for the first day in five against the dollar as the Confederation of British Industry said price pressures have made a second-quarter interest rate increase more likely. Short-sterling futures contracts fell, pushing up yields, as investors added to bets the Bank of England will lift borrowing costs. Analysts surveyed by Bloomberg unanimously predict central bank policy makers will keep the main rate at 0.5 percent tomorrow. Food price inflation accelerated to the fastest pace in 19 months in January, according to British Retail Consortium data. The pound was 0.2 percent stronger at $1.6093 as of 8:42 a.m. in London. It reached $1.6279 on Feb. 3, the strongest level since Nov. 5. Against the euro, sterling was little changed at 84.83 pence. The implied yield on December short-sterling futures rose four basis points to 1.73 percent. U.K. government bonds opened lower, with 10-year gilts falling for an eighth day and sending the yield two basis points higher to 3.86 percent. The two-year note yield rose three basis points to 1.56 percent. To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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