LONDON, Aug 25 Reuters The British pound dropped to a 10week low on Friday as investors rein in expectations of where they think the Bank of England39;s interest rate might peak after recent soft activity data.

SP Global39;s flash purchasing managers39; index PMI for August, released on Wednesday, showed business activity contracted, indicating the UK economy was on course to shrink in the third quarter and prompting markets to scale back tightening bets.

Sterling was last down 0.1 at 1.2591, having earlier dropped to its lowest level since June 13 at 1.2560. The euro stood at 85.72 pence , also down 0.1.

Weaker thanforecast retail sales last week and dismal PMI this week have raised concerns over the health of the UK economy and recession fears, said Fiona Cincotta, financial market analyst at City Index.

The dollar was broadly stronger, also rising against the yen and euro, before Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde take the stage at the Jackson Hole Symposium later on Friday.

BoE Governor Andrew Bailey is skipping the event, with Deputy Governor Ben Broadbent representing the central bank at the Wyoming meetup on Saturday.

His remarks are scheduled for tomorrow, so we39;ll need to wait for Monday to see any impact on sterling, said ING FX strategist Francesco Pesole.

The recent volatility in the BoE peak rate expectations on the back of data releases means the return of some BoE comments after a long…