LONDON: Sterling hit a one-week high against the dollar and British bond yields surged to a post-Brexit peak after data showed the country grew at a faster than expected pace in the third quarter, reducing chances of an interest rate cut in the near term.
Gross domestic product expanded by 0.5 percent in the July-September period, less rapid than the unusually strong growth of 0.7 percent seen in the second quarter but comfortably above a median forecast of 0.3 percent in a Reuters poll of economists.
Compared with the third quarter of last year, growth picked up to 2.3 percent, the strongest pace in more than a year, according to the preliminary figures from the Office for National Statistics.
The data which did not include details of consumer spending or capital investments gave investors the first broad insight into whether Brexit-inspired uncertainty was affecting the economy or not. Britain voted to leave the European Union in June.
Sterling rose to a high of $1.2273, its highest since Oct 20 and up 0.1 percent on the day. It was trading at $1.2240 beforehand. The euro fell to a low of 88.93 pence , having traded at 89.165 pence before the data was released.
UK 10-year gilt yields rose 7 basis points to 1.23 percent , the highest since the Brexit vote in June.
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