* Graphic: sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
By Jamie McGeever and Jemima Kelly
LONDON, Dec 22 Sterling fell to a five-week low
against the dollar on Thursday after a British consumers survey
showing gloom about the economy's prospects next year kept it on
the defensive and as worries about Brexit weighed on the
Against a perkier euro, the pound fell 0.7 percent to a two-
week low of 85.07 pence. That made it sterling's
fourth consecutive daily fall against the single currency, its
longest losing streak since August, as it got caught in the
slipstream of the single currency's recovery from a 14-year low
against the greenback this week.
Sterling has for the past six months been less sensitive
than usual to economic data, driven more by concerns over
Britain's departure from the EU.
Any signs that a hard Brexit, in which Britain loses access
to the single market, is on the cards have tended to drive down
the currency, with signs to the contrary giving it a boost.
Analysts say the trend is set to continue.
"Between January and March, there may be further clarity on
the UK's negotiation approach with its EU partners as Theresa
May plans to publish a 'Brexit plan'," said Nomura currency
strategist Jordan Rochester.
"Our concern is that the market is too complacent and
optimistic in its Brexit pricing as UK asset pricing seems to
suggest the market is moving away from a hard Brexit pricing,
with little concrete reason."
Sterling fell as much as 0.3 percent to $1.2312,
its lowest since Nov. 18.
A big jump in households' appetite for major purchases
helped market research company GfK's monthly consumer sentiment
index inch up to -7 in December from -8 in November, but this
concealed a deterioration in consumers' outlook for 2017.
Expectations for the year to come are now the weakest since
just after June's vote to leave the European Union, and before
that they were last lower in April 2013, when the economy had
suffered a period of sluggish growth.
"Both the economic and financial situation expected by
consumers over the next 12 months has deteriorated, and hints
that confidence will slide more clearly in the first half of
2017," JP Morgan economist Allan Monks said.
(Editing by Tom Heneghan)