LONDON: The pound fell on Friday after data showed the British economy shrank unexpectedly in October, which could prompt traders to attach a greater chance to the prospect of speedier rate cuts by the Bank of England next year.

Official data showed UK economic activity contracted 0.1% in October.

Sterling rises towards highest in over 2-1/2 years versus euro

A Reuters poll of economists had forecast a rise of 0.1% last month, from September’s 0.1% fall.

Sterling initially fell as much as 0.3% after the numbers and was last down 0.24% at $1.2642.