The British economy unexpectedly shrank during January, piling pressure on Treasury chief Rachel Reeves before a key statement about the state of the public finances later this month. Official figures Friday showed that the economy,

Sterling lost some ground versus the dollar on Friday after data painted a grim picture of the British economy, and it softened against the euro as prospects of a German debt deal lifted the shared European currency.

The U.K.'s economy unexpectedly shrank by 0.1% month-on-month in January, official figures showed on Friday. Britain's Office for National Statistics said the fall was mainly due to a contraction in the production sector. Economists polled by Reuters had expected the country's GDP to grow by 0.1%.