LONDON, Feb 10 Reuters The pound eased on Friday after data showed the UK economy ground to a halt in the final three months of 2022, avoiding a technical recession, but logging zero growth.

Monthly British gross domestic product data for December a month marked by widespread rail strikes and bad weather showed a 0.5 contraction, the Office for National Statistics said, larger than the 0.3 forecast.

The Bank of England forecast last week that Britain would enter a shallow but lengthy recession, starting in the first quarter of this year and lasting five quarters.

Ultimately, this isn39;t a story of whether the UK is in recession or not as that39;s just a simple technical definition, OANDA strategist Craig Erlam said.

It39;s a story of zero growth quite literally in the case of the fourth quarter and the fact that this likely represents the recent past, present, and nearterm future prospects for the UK economy. High but falling inflation and basically no growth for some time. It39;s all a bit bleak really, he said.

The negative impact on the pound was brief though as the data doesn39;t tell us anything we didn39;t already know, nor does it alter the outlook on inflation or interest rates, he added.

Money markets show traders believe UK interest rates will peak below 4.40 by late summer, from 4 right now. UK consumer inflation data is due next week and may have more impact on those expectations.

Sterling was last down 0.3 against the dollar at 1.2089, but was…