Sling pound on track for weekly gains despite mixed outlook

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Sling pound on track for weekly gains despite mixed outlook

LONDON, Jan 7 Reuters -- Sterling was on track for weekly gains against the dollar and euro to start 2022 despite a mixed picture for Britain's economy.

The currency has strengthened since December due to the Omicron variant of COVID 19 proving less disruptive to the economy than originally feared, with the government only tightening restrictions so far, analysts have said.

The pound was on track for a 0.2% gain versus the dollar for the week and 0.8% increase against the euro.

The pound was up 0.1% against the dollar at $1.35560 on the day. It fell to 83.515 pence per euro against the euro.

The economic survey data this week shows that Omicron has had an impact. Growth cooled in December, falling to a three month low, according to the survey data for Britain's construction sector on Friday.

A similar Purchasing Managers' Index PMI survey for the services sector on Thursday showed the biggest loss of momentum since the country was last in lockdown, falling to a 10 month low in December.

The pound has been steady against the dollar, despite a one-year low of $1.31615 hit in December.

Investors will be watching to see if the Bank of England will tighten policy, with a further interest rate rise expected as early as next month after a surprise hike in December.