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By Bloomberg

The pound weakened against the euro for a sixth day, its longest run of losses in more than a year, after a report showed a slowdown in the growth of Britain’s services sector.

Sterling fell versus more than half of its 16 major counterparts after the Markit Economics Purchasing Managers Index for services fell to 56.5 in May, missing economist forecasts of 59.2 and coming in below the prior month’s 59.5. A gauge of U.K. house-price growth meanwhile was the slowest in almost two years, casting further doubt on the nation’s recovery.

“We haven’t seen a number this weak since the back end of last year and that’s disappointing,” said Jeremy Stretch, the head of currency strategy at Canadian Imperial Bank of Commerce in London. “It suggests that the expected rebound” in Britain’s economy this quarter “looks rather less robust than we might have thought.”

The pound weakened 0.1 percent to 72.74 pence per euro as of 1:34 p.m. London time, contributing to its longest run of losses since May 2014. It dropped 0.4 percent to $1.5281.

A reading above 50 on the PMI data still indicates expansion and Stretch said he was “not yet convinced that the resilience of sterling is going to be permanently compromised by this data.”

The declines helped cut the pound’s increase over the past month to 2.7 percent against a basket of peers tracked by Bloomberg Correlation-Weighted Indexes, still the best performance in the group.

The European Central Bank said Wednesday it kept interest rates on hold at record lows as data signaled that the risk of deflation in the euro area is waning.

Mixed Signals

Data out of the U.K. has provided little clarity on the health of the economy and made it tough to predict where sterling is headed. A report earlier this week showed an index of manufacturing come in below estimates, but mortgage approvals jumped the most in six years in April.

One-month volatility on the pound against the dollar has risen for three straight days.

“How much lower we go from here? I suspect not very far,” said Daragh Maher, a foreign-exchange strategist at HSBC Holdings Plc in London. “The market will say ‘Hold on, the numbers are less good-than-expected, but none of these are entirely bad numbers. That is the difficulty.’’

The Bank of England is expected to keep interest rates and the size of its asset purchase program unchanged, when it announces its decision on Thursday and investors will have to wait until the BOE minutes later in the month for hints on when the central bank will tighten policy.

The yield on benchmark 10-year gilts rose one basis point, or 0.01 percentage point, to 1.99 percent, and touched 2.02 percent, its highest since May 14. The 5 percent bond due in March 2025 fell 0.115, or 1.15 pounds per 1,000-pound face amount, to 126.565.