The pound declined against the euro for the first time in four days on falling stocks and concern the currency will weaken as the Bank of England prints money to bring down borrowing costs. Sterling also fell against most of the 16 major currencies tracked by Bloomberg as a Morgan Stanley report said profits in the U.K. will plunge more than during the Great Depression as banking losses deepen and crude oil prices slide. “The equity market is providing most of the bad news for sterling,” said Ian Stannard, a London-based currency strategist at BNP Paribas SA. “Optimism we saw earlier in the day is fading quite quickly. There’s a lot of risk on the horizon.” The pound declined 1 percent to 89.72 pence per euro at 6:15 p.m. in London, from 88.82 pence yesterday. Against the dollar, sterling was little changed at $1.4120. The Bank of England reduced its benchmark rate to an all- time low of 0.5 percent yesterday, from 5 percent in October. Britain’s currency fell 27 percent against the dollar and 23 percent versus the euro last year as the economy faced its first recession since 1991. The Bank of England said yesterday it will spend 75 billion pounds ($106 billion) buying government and corporate bonds in the next three months. The currency also fell as the FTSE 100 Index slipped 7.8 percent this week, the biggest drop in about three months. Earnings will fall 60 percent from peak to trough, London-based Morgan Stanley equity strategists Graham Secker and Charlotte Swing wrote in a report dated yesterday, adding the firm’s data indicate profits dropped about 57 percent in the early 1930s. The U.K.’s 10-year government bonds surged, posting the biggest weekly gain since 1992, as the Bank of England said it plans to buy medium- and longer-maturity gilts as well as shorter-dated notes and corporate debt.

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