Pound Falls Most in 2 Weeks Versus Euro as Manufacturing Shrinks

The pound dropped the most in two weeks against the euro after an index of U.K. manufacturing declined more in September than economists forecast.

Sterling weakened versus all except two of its 16 major peers after the Bank of England said net lending for homes dropped the most in almost three years. Sterling also weakened against the euro after stress-test results bolstered confidence in Spain’s banking system and spurred demand for the single currency. Gilts fell as Fitch Ratings said U.K. government debt will peak at a higher level than earlier estimated.