Pound recovers after PM says open to longer Brexit transition

* Graphic: World FX rates in 2018

* Graphic: Trade-weighted sterling since Brexit vote

LONDON, Oct 18 (Reuters) - The British pound recovered to turn positive on Thursday after Prime Minister Theresa May confirmed she was open to discussing an extension of the transition period after Brexit.

Sterling traded at $1.3114, flat on the day, after earlier dipping to $1.3076, with traders also preparing for retail sales data for September due at 0830 GMT.

At a dinner on Wednesday evening, May assured EU leaders in Brussels she can still reach a Brexit deal. But she also said Britain was open to extending the transition period after the UK departs the European Union, although she did not think it would need to be used.

Against the euro the pound was down 0.1 percent at 87.77 pence per euro.

The retail sales numbers are expected to show 3.6 percent year-on-year growth in September, according to a Reuters poll of analysts, down from 3.3 percent a month earlier. (Reporting by Tommy Wilkes Editing by Robin Pomeroy)