By Lukanyo Mnyanda Oct. 9 (Bloomberg) -- The U.K. pound fell against the dollar amid speculation the economy remains weak enough for the central bank to keep its benchmark interest rate at an all-time low and boost asset purchases at its next policy meeting. Sterling also fell versus the euro even as a report showed producer prices jumped last month more than economists predicted. Reports next week may show consumer inflation slowed last month, while unemployment increased, according to separate Bloomberg surveys. The Bank of England maintained its main interest rate at a record low of 0.5 percent at its monthly meeting yesterday. “We are quite bearish on sterling,” said Geoff Kendrick, a strategist at UBS AG in London. “In the next meeting, the Bank of England will do more quantitative easing. Ahead of that we get a lot of risk events that could point in that direction.” The pound declined 0.8 percent to $1.5945 as of 10:40 a.m. in London, leaving it 0.1 percent lower in the week. It lost 0.4 pence to 92.42 pence per euro, for a 1.1 percent drop since Oct. 2. The price of goods at factory gates rose 0.5 percent from August, the Office for National Statistics said today in London. The median forecast of 15 economists surveyed by Bloomberg News was for a 0.1 percent increase. On the year, prices increased 0.4 percent after a decline the previous month. A report on Oct. 13 will show the annual inflation rate slowed to 1.3 percent in September, from 1.6 percent a month earlier according to a Bloomberg survey of economists. Separate data a day later will probably show the number of Britons claiming unemployment benefits climbed last month, according to another survey. U.S. Rates Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. central bank will be prepared to raise interest rates when the outlook for the economy “has improved sufficiently.” “There’s a strong belief that the focus of the Bank of England is on the real economy, not inflation,” said Ulrich Leuchtmann, head of currency research at Commerzbank AG in Frankfurt. “Normally higher inflation means higher interest rates and that should be good for the currency. But that’s only true if a central bank reacts to higher inflation.” The Bank of England also left its bond-purchase program unchanged at 175 billion pounds yesterday. The pound slumped 0.6 percent against the single European currency three days ago, after a report showed manufacturing production unexpectedly declined in August to the lowest level in 17 years. The yield on the short-sterling interest-rate futures contract expiring in March 2010 was at 0.84 percent today, from 1.02 percent a month ago, signaling investors are paring bets that policy makers will raise interest rates.

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