Sterling rallied against the dollar and euro on Friday after UK second quarter GDP met expectations, quelling earlier fears that economic growth had slowed more sharply. After data on Thursday showing the biggest slump in UK retail sales in over two decades, investors were bracing for the possibility that growth had slowed markedly.
But the figures - showing that growth of 0.2 percent had slowed to its weakest pace in three years - were not as stark as some in the market had suggested, with some even having predicted flat growth. Sterling up 0.3 percent at $1.9918 against the greenback.
By 0730 GMT, the euro was up 0.2 percent at 79.05 pence, while the pound was broadly steady at $1.9876. Sterling hit a two-week low on Thursday after retail sales slumped 3.9 percent in June, the sharpest monthly fall since the series began in 1986. That wiped up May's record 3.6 percent jump and brought three-month growth to its slowest since late last year.
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