LONDON, Sept 1 Reuters The British pound held steady on Friday as data showed that previous interest rate rises are beginning to weigh on housing and manufacturing, but official figures showed the economy fared better than previously thought through the COVID19 pandemic.

At 1026 GMT, sterling was last flat against the dollar at 1.2674, within its recent monthlong trading range of 1.25481.28175.

It was little changed against the euro, with the single currency last buying 85.58 pence .

British factories suffered their weakest month since early in the COVID19 pandemic, the SP GlobalCIPS UK manufacturing Purchasing Managers39; Index showed on Friday, with orders shrinking dramatically due to the rise in interest rates.

The index was dragged down by a significant decline in production, as the impact of rising interest rates on customer demand continued to grow, said Martin Beck, chief economic advisor to the EY Item Club.

Growing evidence of a weakening economy and disinflationary pressure mean the possibility that the Bank of England39;s MPC Monetary Policy Committee will choose to keep rates unchanged is looking more plausible.

The BoE has raised its key interest rate 14 times since December 2021 to 5.25, its highest level in 15 years.

Markets still expect another increase this month to 5.5 as underlying price pressures have been slow to fall.

Britain39;s housing market is also starting to feel the pinch from previous rate hikes, with house prices suffering their…