The pound eased on Friday after data showed wet weather hit UK consumer spending far more than expected in April, but evidence of sticky inflation, and the surprise announcement this week of a July general election kept sterling near two-month highs.

Sales volumes dropped by 2.3% in April after a 0.2% fall in March, which was downwardly revised from a flat reading, the Office for National Statistics said.

The pound eased on Friday after data showed wet weather hit UK consumer spending far more than expected in April, but evidence of sticky inflation, and the surprise announcement this week of a July general election kept sterling near two-month highs.

Sales volumes dropped by 2.3% in April after a 0.2% fall in March, which was downwardly revised from a flat reading, the Office for National Statistics said.

The euro held in modestly positive territory against the pound , at 85.21 pence.

Investors have slashed the chances of a June rate cut by the Bank of England to below 10%, from around 50% before Wednesday's inflation data.

Two-year gilt yields, the most sensitive to shifts in expectations for the course of monetary policy, are heading for their largest weekly rise so far this year, as investors sold British government bonds.

So far in May, sterling is up against most major currencies and heading for its best monthly performance since November against the dollar, with a gain of 1.6%.

Source: Reuters