The pound fell against the dollar for a third week, reaching a 16-month low, as reports showed growth in manufacturing and the housing market slowed, spurring bets the Bank of England will refrain from raising interest rates. Gilts added to 2014’s returns, the best since 2011, after European Central Bank President Mario Draghi said in an interview in German newspaper Handelsblatt that he can’t rule out the risk of deflation in the 19-nation bloc, the UK’s biggest trading partner. Sterling was little changed versus the euro as falling oil prices stoked speculation that lower energy costs will keep a lid on inflation and delay an increase in BOE borrowing costs while the ECB prepares to expand stimulus.
