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Sterling down as Britain's economy struggles to maintain recovery

* Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv

LONDON, Nov 12 (Reuters) - Sterling traded weaker on Thursday after Britain’s economy grew by a slower than expected 1.1% in September from August, a pace that leaves the country lagging other rich nations in its attempted recovery from the pandemic.

The impact of the number was all the heavier because the period measured was before the latest COVID-19 restrictions on businesses took effect.

Another piece of data released on Thursday showed that in the July-September period, gross domestic product grew by a record 15.5% compared with the previous three months.

Still, this number marginally missed expectations polled by Reuters as well, as economists were looking for 15.8% growth in the third quarter.

“The weaker than expected print will put the brakes on the recent sterling rally and will provide a reality check for the market and will highlight lingering headwinds for the pound in the form of ongoing Brexit negotiations and the growing economic impact of the pandemic,” said Sam Cooper, Vice President of Market Risk Solutions at Silicon Valley Bank.

The United Kingdom reached a bleak milestone in its battle with coronavirus on Wednesday as the official death toll passed 50,000 casting a shadow on the positive news about the effectiveness of a potential vaccine, which was announced on Monday.

British finance minister Rishi Sunak said steps taken to restrict the spread of COVID-19 had likely slowed economic growth since September.

The pound was falling by 0.3% against the U.S. dollar and the euro, last trading at $1.3191 and 89.33 pence respectively.

Traders in the British currency have been dealing with torrid times, as uncertainty and volatility in the pound grew on the back of rising coronavirus cases and the lack of clarity about whether Britain will exit the European Union customs union with a trade deal in hand in January.

A EU-UK trade pact is unlikely to come together this week and negotiations might go into the next, an Irish minister said on Wednesday, confirming a Reuters report that the sides were now set to miss their mid-November deadline for a new Brexit deal.

Irish Prime Minister Micheal Martin said on Thursday the entire world is watching Brexit negotiations, including U.S. President-elect Joe Biden, who was looking forward for a Brexit trade deal to be clinched.

Meanwhile, the top trade representatives for Brazil and the UK held a videoconference on Wednesday to discuss strengthening trade and investment links between the two countries, including a possible post-Brexit bilateral trade deal. (Reporting by Olga Cotaga, Editing by William Maclean)

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