The pound fell versus the dollar, touching the lowest level in almost a year, as a survey of purchasing managers showed growth at U.K. service companies slowed to the least in 17 months in October.
Sterling dropped the most in one week against the U.S. currency as Republicans gained control of the Senate from Democrats in the U.S. midterm elections and Brent crude oil tumbled to a four-year low. U.K. government bonds declined. Bank of England officials begin their two-day policy meeting today. In the previous three meetings, two committee members voted for higher interest rates.
“It’s largely a dollar move in the weakness today,” said Stuart Bennett, head of Group of 10 currency strategy at Banco Santander SA in London. “The midterm elections were taken positively by many in the markets. There are weaker oil prices and a stronger dollar by extension. And with this PMI, which isn’t a terrible number, it’s that it’s worse than expected.”