February 25, 2011 / 9:43 AM / 8 years ago

Sterling falls, gilts up on weak UK GDP data

LONDON, Feb 25 (Reuters) - Sterling fell broadly and gilts cut losses on Friday after a weaker-than-expected reading of UK economic growth pared speculation the Bank of England may raise interest rates by mid-year.

Data showed Britain's economy contracted even faster than previously thought in the last three months of 2010, shrinking by 0.6 percent, after downward revisions to industrial and services output. [ID:nAHLODE7DU] Sterling GBP=D4 hit the day's low of $1.6097 after the data, having traded around $1.6142 beforehand.

The euro EURGBP=D4 rose around 25 pips to 85.82 pence, its highest since late January.

The March gilt future FLGH1 was 2 ticks up at 117.70 after the release, having stood at 117.47, 21 ticks down, beforehand.

Short sterling rate futures were as much as 5 ticks up across the strip after the release, having traded as much as 3 ticks down across the strip previously.

Reporting by London Markets Team

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