Britain's currency dropped from near a three-week high versus the dollar after the Financial Times reported more than 20 percent of homebuyers with a poor credit history fell behind on their mortgage repayments in the first quarter. House prices in the U.K. slipped for an eighth month in May and will probably drop further, London-based Hometrack Ltd. said yesterday.
The pound dropped to $1.9775 by 12:15 p.m. in London, from $1.9821 yesterday. The U.K. currency also slipped to 79.64 pence per euro, from 79.58 pence. It weakened versus 14 of the 16 most- traded currencies tracked by Bloomberg, slipping the most against the South Korean won and Norwegian krone.
The mortgage-deliquincies data, from Standard & Poor's, suggested more than 7 billion pounds of home loans are at risk of default, the FT reported today.
The report added to signs an economic slowdown that's caused the pound to drop 8.6 percent against the euro and 0.6 percent versus the dollar this year has further to run. Britain's economy grew at the slowest pace in three years in the first quarter, a government report showed May 23.
Gilts rose. The spread, or yield difference, between two-and 10-year notes remained inverted for a fourth day as traders bet accelerating inflation will prevent the Bank of England cutting interest rates next month, even as economic growth slows.