Sterling was slightly higher against the dollar and flat versus the euro on Monday, with early gains wiped out after momentum gained on stronger than expected UK data faded.
UK retail sales rose by a monthly 0.7 percent in March, more than double forecasts, whilst the British Bankers' Association said underlying mortgage lending growth jumped in March to its highest level in nearly two years.
The upbeat numbers dampened expectations that the Bank of England could cut rates from the current 4.50 percent in coming months - a move which would be especially negative for sterling at a time when other major central banks are tightening policy.
Sterling rose as high as $1.7931 after the data, just short of last week's seven-month high of $1.7935. By 1414 GMT, sterling was trading at $1.7831, up just 0.1 percent on the day. It was also flat on the day versus the euro at 69.26 pence, off a post-data session peak of 69.04 pence.
"We got a knee-jerk reaction to better than expected headline (retail sales) rate but still consumption was substantially weaker in the first quarter than it was in the fourth quarter of last year and there will be still some concerns about how the consumer will fare going forward," said Daragh Maher, senior currency strategist at Calyon.
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