U.K. Pound Declines Against Euro

The U.K. pound fell against the euro after a British Bankers' Association report showed mortgage approvals slid last month to the lowest level since at least 1997.

The currency also dropped against the U.S. dollar as traders trimmed bets the Bank of England will raise interest rates to curb inflation amid slowing economic growth. Expansion will be ``much slower'' over the coming year, Andrew Sentance, a member of the central bank's Monetary Policy Committee, wrote in a newspaper article published yesterday.

The pound fell 0.3 percent to 79.19 pence per euro by 12:18 p.m. in London, from 78.95 yesterday. It also dropped to $1.9641, from $1.9643, from $1.9654.

Banks granted 27,968 loans for house purchase, down 56 percent from a year earlier, the London-based BBA, which represents the U.K.'s biggest lenders, said today in a statement. The number is down 20 percent from April.

Property values may fall 9 percent this year as banks increase the cost of mortgages following the global credit crunch, HBOS Plc said last week. Bank of England Governor Mervyn King has said that a weaker housing market will go ``hand in hand'' with a slowdown in consumer spending and economic expansion.

U.K. Pound Declines Against Euro

TradingEconomics.com, Bloomberg
6/24/2008 6:28:31 AM