"Speculation U.K. Inflation to Quicken" -- Bloomberg

[TexasLawyer]

Pound Advances on Speculation Pace of U.K. Inflation to Quicken
March 21 (Bloomberg) --

The pound rose against the euro on speculation the pace of inflation in Europe's second-largest economy will quicken, stoking speculation the Bank of England will add to its five interest-rate increases since November 2003.

Consumer-price inflation may have gained 0.3 percent in February, from a drop of 0.5 percent a month earlier, according to the median estimate of 28 economists polled by Bloomberg. The report from the Office for National Statistics is due tomorrow. "If inflation is ticking back up then that really will help the outlook on interest rates," said Lee Ferridge, a proprietary trader at Rabobank Groep in London. "The Bank of England will hike rates in May, and sterling will continue performing well."

Against the euro, the U.K. currency was at 69.18 pence by 7:50 a.m. in London from 69.34 pence late on March 18. The pound was also at $1.9141 from $1.9203.

Still, gains for the pound may be limited on further signs of a slowing in the U.K. property market after an industry report showed almost twice the number of Britons put their homes up for sale in March than bought houses, the biggest gap in three years, property Web site Rightmove said.

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http://www.bloomberg.com/apps/news?pid=10000102&sid=aFEW5sSU.75U&refer=uk