LONDON: The pound strengthened on Tuesday after data showed an unexpected bounce in British business activity, suggesting the economy may be sidestepping the risk of recession.

The pound gained 0.5% against the dollar to $1.2094 , and also firmed against the euro, with the European common currency dropping 0.72% to 88.17 pence.

The move followed the release of Britain's preliminary "flash" Purchasing Managers' Index, which jumped to 53.0 in February from 48.5 in January, above the 50 threshold for growth for the first time since July, and surpassing all forecasts in a Reuters poll of more than 20 economists, which had pointed to a reading of 49.0.

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