Sterling made its way back towards 1.12 on Friday but has edged down in trading this morning

Sterling enjoyed a slight rally at the end of last week, once again briefly stretching up over 1.12 against the single currency before closing at 1.1188, up 0.2% on the day.

• Sterling recovered some of its two-week losses against the euro on Friday as traders closed short positions in the UK currency ahead of the weekend.
  
• The single currency found itself on the back foot after data showed that the eurozone returned to growth in the third quarter, but at a slower pace than expected.
  
• The euro-zone economy registered quarter-over-quarter growth of 0.4%. The figure fell short of the 0.6% increase forecast by economists, largely due to a weaker-than-expected outcome turned in by both France and Germany, the region's two largest economies.
  
• The pound also found support as a planned merger between British Airways and the Spanish Iberia airline spurred speculation that the economy is improving.
  
• Analysts noted that the slight gain for sterling on Friday showed an unwinding of pessimism that followed the inflation report, although the currency would remain volatile because of the continued uncertainty on the British monetary policy.