Sterling steadies as UK economy returns to modest growth

Sterling steadied on Wednesday, after declines this week, as data showed Britain's economy had returned to growth in January after entering a shallow recession in the second half of 2023. Gross domestic product (GDP) grew by 0.2% month-on-month – boosted by a rebound in retailing and house-building – after a fall of 0.1% in December, in line with economists' expectations in a Reuters poll. "This (latest GDP) data suggests that the UK economy merely dipped its toe into recession, and is quickly returning back to growth, although it is still fairly lacklustre at this stage," said Kathleen Brooks, research director at XTB.