Britain's Pound Falls to Record Against Euro

The pound fell to a record against the euro after the U.K.'s biggest mortgage lender said house prices dropped by the most since 1992 last month, adding to the case for an interest-rate cut this week., Bloomberg 4/8/2008 7:39:24 AM

Britain's currency also declined versus the dollar after HBOS Plc said the average cost of a home fell a more-than- forecast 2.5 percent as high street banks restricted mortgage lending amid the credit squeeze. The Bank of England will cut its main rate a quarter-percentage point to 5 percent April 10, according to 50 of 61 economists in a Bloomberg News survey.

The pound dropped to 79.88 pence per euro, the lowest level since the euro's 1999 inception, and was at 79.87 pence as of 12:10 p.m. in London, from 79.02 pence yesterday. It has declined almost 9 percent versus the European currency this year.

The pound also weakened to a six-week low of $1.9691, from $1.9883. It may fall to $1.93 in six months, Robinson said.

The average house price in the U.K. fell to 191,556 pounds, HBOS said in a statement on the Regulatory News Service today. Economists predicted a 0.3 percent decline, according to the median of 12 estimates in a Bloomberg survey.