Pound pares gains, gilts up after GDP revision

LONDON (Reuters) - Sterling pared gains and gilt futures rose on Wednesday after revisions to third quarter UK gross domestic product were in line with forecasts, disappointing those who had expected a bigger upward revision.

The British economy shrank by 0.3 percent in the third quarter, the revised figures showed, compared with the initial estimate of a 0.4 percent contraction.

"Basically, there were rumours it was going to be a strong upward revision but it came in on consensus, so there's been a bit of a relief rally (in interest rate markets)," said a London-based gilts trader.

Sterling fell almost half a cent to $1.6670 from around $1.6715 just before the numbers, and the euro rose 30 ticks to 90.10 pence. Sterling was still up on the day, however.

Gilt futures shrugged off earlier losses, gaining 12 ticks to trade 9 ticks up on the day at 118.79 by 9:34 a.m., having traded 3 ticks down at 118.67 before the data.