Sterling is headed for its largest one month falls against the euro for
the last year amid expectations that euro-zone exchange rate rises will
soon outpace the rate in the UK.

In foreign exchange trading yesterday the pound fell to 67.37p against
the euro from 67.49p previously, and from $1.9619 to $1.9622.

Over the month, the pound has fallen 1.6 per cent against the single
currency as traders scaled back their sterling positions.

The balance of economists forecast one further Bank of England rate rise
this year, compared to two European Central Bank (ECB) rises, a
Bloomberg survey has shown.

"We've seen an unwinding of some of the expectations for higher rates,"
said Ian Gunner of Mellon Financial Corporation.

"Consumer price inflation softened off, wages haven't risen as fast as
forecast and we expect euro-sterling to go higher further out as ECB
rate increases will be more durable."