LONDON: Sterling rose to a one-week high against a struggling euro on Tuesday after data showed the British economy grew at a faster pace in the fourth quarter of last year than previously estimated.
Gross domestic product between October and December grew by a quarterly 0.6 percent, the Office for National Statistics said, compared with 0.5 percent in a previous reading and matching the pace of growth in the third quarter.
The euro fell to a low of 72.56 pence, from 72.785 pence, down 0.8 percent on the day. Against the dollar, sterling climbed to $1.4788 after the data was released, from around $1.4765 beforehand.
"Sterling strengthened following stronger-than-expected consumer confidence for March, which hit a 12-year high, and an unexpected upwards revision to fourth-quarter GDP and annualised growth," said Andy Scott, associate director of FX advisory services at foreign currency specialists HiFX.
British finance minister George Osborne tweeted that the data confirmed Britain was the fastest growing major advanced economy.
The growth data provided some respite to the pound which has struggled in the past few days on growing expectations that the Bank of England will keep interest rates lower for longer and rising uncertainty from a general election next month.
Britain holds a parliamentary election on May 7 and the latest opinion polls point to a hung parliament in which no single party can form a government on its own.
"We have had a lot of noise about the election. Given the uncertainty, I think cable (sterling/dollar) could head somewhat lower but euro/sterling is fairly priced," said John Hardy, FX strategist at Saxo Bank.
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