U.K. Currency Advances on Signs Housing Market Is ‘Stabilizing’

By Anna Rascouet

June 9 (Bloomberg) -- The pound climbed to its highest level in almost a week against the dollar after the Royal Institution of Chartered Surveyors said the U.K. housing market is “stabilizing,” stoking optimism the worst of the recession is over.

The pound also rose versus the euro and yen on speculation Prime Minister Gordon Brown has fended off calls to step down following a series of ministerial resignations and a drubbing in local and European elections. Gilts gained as the government sold all 5 billion pounds ($8 billion) of the five-year securities it offered today, and said it will hire banks to sell 25-year bonds, the first time it has done so in four years.

“The housing data and the improvement in Gordon Brown’s fortunes for the time being are providing support for the pound,” said Gavin Friend, a markets strategist in London at National Australia Bank. “There’s an appetite for risk out there today.”

The pound appreciated 1.3 percent to $1.6264 by 4:44 p.m. in London, and 0.6 percent to 86.12 pence per euro. It also strengthened 0.3 percent to 158.59 yen.

The number of respondents in a monthly survey for May saying U.K. home values fell exceeded those reporting gains by 44.1 percentage points, the best reading since November 2007, the RICS said today. Property sales per agent rose to 11.8 in the three months through May, the highest since August 2008.

Brown won the support of most Labour lawmakers by promising to make unspecified changes to his leadership style and agenda, after confronting dissidents at a two-hour closed-door meeting in London late yesterday, according to six who attended.

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