Ovetii - Plummetting Mortgage Approvals cause report UK Pound to Drop Against Euro
Released on: December 3, 2007, 6:01 am
Press Release Author: InvestLine
Industry: Financial
Press Release Summary: Ovetii recently reported that the pound fell against the euro after an industry report showed mortgage approvals fell by a quarter in September, stoking speculation that the Bank of England will be forced to cut interest rates this year.
Press Release Body: Sources say that, according to reports by Ovetii of Greece, the pound also slid versus 15 of the 16 most-traded currencies tracked by Bloomberg after the U.K. central bank said the commercial property and financial sectors remain vulnerable to further shocks. Banks granted 27 percent fewer loans for house purchases compared with a year earlier.
An Ovetii senior analyst reportedly said the key in the currency markets is deciding which central bank is going to cut first, the BOE was telegraphing that there\'s going to need to be a policy response sooner rather than later.
The pound fell to 69.71 pence per euro recently in London, from 69.60 pence. The pound also declined to $2.0480, from $2.0499.
Banks granted 52,685 loans for house purchases last month, from 61,051 in August, said the BBA, which represents the biggest U.K. banks. The annual drop was the biggest in 2 1/2 years.
The Bank of England said in its financial stability report today that markets are more susceptible to a potential slump in global stocks or a crash in commercial property after the U.S. subprime-mortgage collapse.
Apparently Ovetii researchers believe that, in a worst-case scenario, U.K. banks would have to raise as much as 170 billion pounds ($348 billion) if market conditions prevented them from selling the loans on their balance sheets to other investors, the central bank said.
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