The figures were a blow to the government the day before finance minister George Osborne's mid-year budget statement. But the pound showed little reaction and later hit a one-month high of $1.6131, its highest level since November 2, after triggering stop-loss buy orders just above $1.6120.
Sterling was last trading up 0.15 percent on the day at $1.6110, with options barriers reported at $1.6150. "Sterling looks fully valued up at these levels unless we see further topside impetus given by the services PMI on Wednesday," said Jeremy Stretch, head of currency strategy at CIBC World Markets. A Reuters poll forecast a services PMI reading of 51.1 for November, which would be a slight pick-up in growth compared with 50.6 the previous month and could lift sterling.
"If we get another surprise in the PMI data then we would expect sterling/dollar to move higher," said Kathleen Brooks, research director at Forex.com. The pound fell against the euro, which was up 0.2 percent at 81.25 pence, not far from the five-week high of 81.325 pence it posted last week. The euro gained broad support on expectations a Greek debt buyback deal, announced on Monday, will be implemented smoothly although rises against the pound were expected to be limited.