Aug 12 Reuters Sterling slid against a firming dollar on Friday and also lost ground on the euro as data showed Britain39;s economy contracted in June, even if not by as much as had been feared.

The Office for National Statistics said gross domestic product fell by 0.6 in June, the biggest contraction since January 2021 but less severe than the 1.3 drop predicted by a Reuters poll of economists.

The pound tumbled 0.58 against the dollar to 1.2143, in morning trade, falling more sharply than peers against the rallying greenback.

The euro and Japanese yen also lost ground, however, as markets digested a new round of hawkish remarks from policy makers at the U.S. Federal Reserve, helping the dollar regain some of its losses from earlier in the week.

June39;s GDP decline was partly a result of two bank holidays in the month to celebrate Queen Elizabeth39;s Platinum Jubilee.

The data also suggested growing weakness among consumerfacing sectors of the economy as Britons deal with inflation reaching a 40year high in the wake of the war in Ukraine.

The euro climbed 0.3 on the pound to 84.82 pence its highest in twoandahalf weeks.

It is up nearly 0.5 on the week, which would be its biggest weekly gain since mid June, though may struggle to climb much further.

EURGBP is slightly stronger than we thought and could edge up to the 0.8485 area. But given the challenges faced on the continent, we would not chase EURGBP higher, analysts at ING said in a note.

Both Britain and…