The pound rose versus the euro as the Bank of England left its benchmark interest rate unchanged at 0.5 percent. Sterling appreciated against 12 of its 16 most-actively traded counterparts, rising most against the Norwegian krone. The bank’s nine-member Monetary Policy Committee, led by Governor Mervyn King, left its main rate at a record low as forecast by all 62 economists surveyed by Bloomberg. It also held its bond-purchase plan at 200 billion pounds ($321 billion), in line with the median estimate of a separate poll of 38 analysts. “The BOE is going to wait and see whether headline inflation becomes embedded and the key indicator for that will be wages,” Sarah Hewin, a senior economist at Standard Chartered Bank in London, said before the decision. “At the moment wage growth is way below the level needed to impact inflation.” The pound was 0.4 percent stronger at 84.92 pence per euro at 12:04 p.m. in London after rising as much as 0.5 percent. Britain’s currency depreciated 0.3 percent to $1.6058. The Bank of England is under mounting pressure to raise borrowing costs for the first time since July 2007 curb inflation, which has exceeded its target level for more than a year. Former rate setter DeAnne Julius said yesterday the bank needs to tighten policy “sooner rather than later” or risk losing credibility. Rates ‘On Hold’ Policy committee member Martin Weale joined colleague Andrew Sentance in voting for a rate increase at the group’s Jan. 13 meeting on concern that inflation may become entrenched. Inflation accelerated to 3.7 percent in December, equaling an April reading that was the highest since November 2008. “We think rates will stay on hold for the rest of the year and sterling will soften against the dollar,” Hewin said. U.K. two-year notes rose, pushing the yield on the 4.5 percent security due March 2013 down two basis points to 1.53 percent. The note rose 0.03, or 30 pence per 1,000-pound face amount, to 106.02. To contact the reporter on this story: Garth Theunissen in London gtheunissen@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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