British pound rises as Brexit debate rumbles on

British pound rises as Brexit debate rumbles on

LONDON, Nov 12 Reuters - Sterling edged higher on Friday after reports suggesting Britain wanted to de-escalate tensions with the European Union and renew efforts to find a solution over a Northern Ireland trade dispute.

The sterling was under renewed pressure this week due to concerns that disagreements between Britain and the EU could cause major trade disruptions.

Britain's departure from the EU last year has delayed the introduction of some border checks between the British province of Northern Ireland and the EU- member Ireland.

The Times reported on Friday that Britain was ready to step back after threatening to invoke emergency unilateral provisions and find an agreement with the EU.

The pound edged 0.2% higher against the dollar at 940 GMT, not far from its lowest level since December of $1.3354 touched overnight. It was set for its third consecutive week of declines against the dollar.

It rose 0.25% to 85.47 pence against the euro and was set for weekly gains after falling against the single currency in the previous week.

The pound's move is reflective of easing Brexit tensions and the removal of downside risk to an already flagging growth narrative, said Simon Harvey, a currency analyst at Monex Europe.

The British economy was struggling with supply chain disruptions, shortage of workers and a fuel crisis, as sterling fell more than 6% against the dollar in the last six months.

The Bank of England left its main interest rate unchanged at 0.1% in its November policy meeting, having previously signaled it could raise it.

Markets are pricing in a high probability of a December rate rise, but uncertainty remains high.

The European Commission's Maros Sefcovic will meet with Britain's Brexit minister David Frost on Friday to discuss changes to trade rules.