The U.K. pound declined against the euro and the dollar amid speculation the recession is worsening as the Bank of England extends its asset-buying program. The U.K. currency breached 90 pence per euro for the first time since April 29 as the nation’s FTSE 350 Banks Index headed for its biggest loss in three weeks. 28. Reports tomorrow will show house prices and manufacturing production declined, according to Bloomberg News surveys. The central bank said last week it will spend an extra 50 billion pounds ($76 billion) of newly printed money to spur economic growth. “The Bank of England’s aggressive stance with regard to quantitative easing is adding to concern about the economy and that is negative for sterling,” said Ulrich Leuchtmann, head of currency strategy in Frankfurt at Commerzbank AG, Germany’s second-largest bank. “We’ve seen a relatively strong upward trend in the euro against sterling.” The pound dropped for a third day versus the euro, weakening 0.6 percent to 90 pence by 11:35 a.m. in London, after reaching 90.03, the weakest level since April 29. It depreciated 0.8 percent to $1.5113. The U.K. currency may “target” 90.50 pence per euro, after breaching 90 pence, Leuchtmann said. U.K. gilts rose as stock-market losses spurred demand for the safest assets. The gain pushed the 10-year yield down seven basis points to 3.66 percent. The 4.5 percent security due in March 2019 gained 0.59, or 5.9 pounds per 1,000-pound face amount, to 106.90. The two-year yield slipped nine basis points to 1.12 percent. Bond yields move inversely to prices.

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