LONDON (Bloomberg) -- The pound declined for a third week against the dollar as money-market rates for the UK currency failed to respond for a second day to combined action by central banks to ease a yearend credit squeeze.

The cost of borrowing pounds for three-months fell 1 basis point to 6.5 percent, the British Bankers' Association said Dec. 14, 1 percentage point more than the Bank of England's benchmark lending rate.
“Concerns about the high level of Libor rates in the UK and euro zone and the essential failure of the central banks' liquidity additions” account for some of the pound's decline, said Adrian Schmidt, a senior foreign-exchange strategist at Royal Bank of Scotland Plc. in London. More currency weakness is priced into the U.S. and “going forward the risks are greater in the UK and Europe.”
The pound fell 0.5 percent this past week to $2.0210. It was at 71.43 pence per euro and weakened to 228.96 against the yen.
Bank of England policy maker Kate Barker said weakness in the UK currency has benefited British manufacturers.
“Sterling has weakened off a bit and that is good news for a lot of these companies,” Barker was cited by the Yorkshire Post as saying during a visit to Leeds, north England, on Dec 13. “Manufacturing companies at the moment are doing quite well.”
-------------------------------Pessimistic
The pound has fallen 1.5 percent in the past month as the UK central bank cut interest rates for the first time in two years amid a housing slowdown and as credit turmoil threats economic growth.
Real-estate agents and surveyors are the most pessimistic about UK home prices since at least 1998. The London-based Royal Institution of Chartered Surveyors said its index of expected house prices fell to minus 47 in November, from minus 35.3 the previous month.