Pound Drops Versus Euro


The pound fell as an industry report showed London's property market had the most widespread price declines in at least 14 years last month, raising prospects of an interest-rate cut in June.

The U.K. currency dropped against the dollar and euro after the Royal Institution of Chartered Surveyors had its lowest reading on house prices for the whole country since its studies began in 1978. The pound stayed lower even as a government report may show the U.K. inflation rate accelerated to 2.6 percent in April, economists said.

The pound fell as much as 0.3 percent to 79.68 per euro, and was at 79.53 pence by 8:58 p.m. in London, from 97.45 late yesterday. It was at $1.9520, from $1.9577.

The RICS survey showed the number of residential property agents and surveyors saying prices fell in the U.K. capital exceeded those reporting gains by 94 percentage points, the lowest level since records began in 1994. The reading for the whole country fell to minus 95.1, the least since the series began 30 years ago, it reported.

A separate government report may show annual house- price gains slowed in March.

U.K. property values rose 4.5 percent from a year earlier, compared with 6.7 percent in February, according to a survey of 11 economists by Bloomberg News. The Department for Communities and Local Government will release the data at 9:30 a.m. in London.

Separately, the government will say U.K. consumer prices rose 2.6 percent in April from a year earlier, the most in 12 months, the median forecast of 37 economists in a Bloomberg survey shows. The Office for National Statistics will release the data at 9:30 a.m. in London.

Prices charged by U.K. factories rose 7.5 percent from a year earlier, the most since records began two decades ago, the ONS said yesterday.


TradingEconomics.com, Bloomberg
5/13/2008 6:36:28 AM