LONDON (Reuters) - The British pound extended its gains on Friday after surveys showed that British companies are enjoying their best month in more than a year, although the rally was brief as a potential Bank of England interest rate cut hangs in the balance.
Sterling rose as much as 0.3% to $1.3180 GBP=D3 before erasing those gains. It was last flat on the day at $1.3125.
Against the euro the pound strengthened to 83.90 pence EURGBP=D3 and was last up 0.2% to 84.12 pence.
British stocks .FTSE climbed higher after the purchasing managers index surveys for December came in better than economists had expected.
Reporting by Tommy Reggiori Wilkes; Editing by Saikat Chatterjee