By Keith Jenkins Dec. 11 (Bloomberg) -- The pound was little changed against the dollar and rose versus the yen after Moody’s Investors Service said it has no plans to lower the U.K.’s top credit rating, calming concern the nation’s debt is facing a downgrade. Senior Vice President Tom Byrne said today in an interview that “the outlook is stable” after a Moody’s report on Dec. 8 said the U.K.’s rating may “test the Aaa boundaries” because of worsening public finances. “The comment by Moody’s may assuage some of the concerns about the fiscal deficit,” said Jeremy Stretch, a senior currency strategist at Rabobank International in London. “Investors will find fiscal concerns difficult to ignore in the short term and are still nervous about the longer-term outlook for the U.K.” The pound traded at $1.6297 at 12:09 p.m. in London, compared with $1.6279 yesterday. Sterling erased gains against the euro, weakening to 90.60 pence, from 90.49. It strengthened earlier to 90.22 pence per euro. The pound gained 0.9 percent to 144.80 yen. Concern that the U.K. may lose its Aaa rating increased this week after Chancellor of the Exchequer Alistair Darling said Britain’s budget deficit will be 611 billion pounds ($995 billion) in the four years through March 2013, up from an earlier forecast of 606 billion pounds. Darling also said the economy will contract 4.75 percent this year. Producer prices rose last month at the fastest annual pace in nine months, the Office for National Statistics in London reported today. Producer Prices The prices of goods at factory gates climbed 2.9 percent from a year earlier, matching the median forecast of 16 economists in a Bloomberg News survey. Prices increased 0.2 percent from October in the ninth consecutive monthly gain. “The numbers were bang in line with expectations,” said Paul Robson, senior foreign-exchange strategist at Royal Bank of Scotland Group Plc in London. “We don’t think the inflation outlook is particularly worrying.” Bank of England policy makers held the main rate at a record low 0.5 percent and maintained its asset-purchase facility at 200 billion pounds. The program was implemented in March in an attempt to lower borrowing costs and prevent deflation from taking hold. The yield on the 10-year gilt was little changed at 3.81 percent. The two-year note yield increased 4 basis points, or 0.04 percentage point, to 1.19 percent. To contact the reporter on this story: Keith Jenkins in London at kjenkins3@bloomberg.net

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