The pound was near the weakest in more than four months against the euro as a report showed U.K. mortgage lending fell for a fourth month in August, adding to signs the recovery is faltering. The British currency slipped for a second day versus the yen. Lenders granted 47,372 loans to buy homes, compared with a revised 48,346 in July, the Bank of England said today in London. Economists forecast that approvals would decrease to 47,000 from an initially reported 48,700 in July. The British currency was close to its strongest versus the dollar in six weeks on speculation the Federal Reserve will loosen monetary policy to shore up growth. “Sterling has underperformed most major currencies except for the dollar as people worry about falling house prices and forthcoming austerity,” said Michael Derks, chief strategist at FXPro Financial Services Ltd. in London. “The pound could stay weaker for a while yet.” The pound was little changed at 85.85 pence per euro as of 9:44 a.m. in London after reaching 86.14 pence, the weakest since May 24. It climbed 0.1 percent to $1.5820 and fell 0.2 percent to 132.24 yen. To contact the reporters on this story: Matthew Brown in London at mbrown42@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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