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.