The pound fell, weakening to 91 pence per euro for the first time in more than five months, on speculation the Bank of England will cut the rate it pays financial institutions on deposits and extend asset purchases.

The U.K. currency also dropped against the dollar for a second day after the Daily Telegraph said policy makers called economists to a “crisis meeting” next week to discuss the pound’s decline and the central bank’s so-called quantitative- easing program. The Bank of England made no mention of changes to the deposit rate in minutes of its Sept. 10 policy meeting released yesterday.

“The press reports regarding the economists’ meeting next week could be indicating that issues such as the deposit-rate cut, which was mooted by King last week but wasn’t mentioned in the minutes yesterday, are back on the table,” said Jeremy Stretch, a senior currency strategist at Rabobank International in London. The market is “putting two and two together and seeing the plumbing or the pipes of the U.K. financial system are still a little gummed up.”

The pound fell 1.1 percent to 91.14 pence per euro as of 12:22 p.m. in London and traded at 91.37 pence earlier, the weakest level since April 3. It dropped 0.9 percent to $1.6201.
Bloomberg.com