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Sterling strengthens after UK GDP beats expectations

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Sterling strengthens after UK GDP beats expectations

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LONDON (Reuters) – Sterling climbed almost half a cent against the dollar on Wednesday, while Britain’s main FTSE 100 stock index slipped, after data showed the economy picked up speed unexpectedly in the third quarter. Quarterly gross domestic product growth rose to 0.4 percent compared with 0.3 percent growth in the three months to June 2017, the figures showed. That beat expectations for 0.3 percent growth and cemented expectations that the Bank of England will raise interest rates next week. The pound climbed to $1.3171 after the numbers, up from $1.3124 beforehand and leaving the currency up 0.3 percent on the day. Against the euro, sterling strengthened to 89.37 pence <EURGBP=D3>, also up 0.3 percent on the day. The blue-chip FTSE 100 index <.FTSE>, whose international focus tends to make it inversely correlated with sterling, extended losses slightly, down 0.3 percent on the day. British two-year and 10-year government bond yields <GB2YT=RR> <GB10YT=RR> rose to their highest levels since Oct. 16 after the data, and gilt futures <FLGcv1> turned negative and fell more than 20 ticks on the day to a nine-day low.

(Reporting by Jemima Kelly, Kit Rees and David Milliken; Editing by Polina Ivanova)
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