Pound briefly bounces after better than expected survey data

LONDON (Reuters) - The British pound extended its gains on Friday after surveys showed that British companies are enjoying their best month in more than a year, although the rally was brief as a potential Bank of England interest rate cut hangs in the balance.

Sterling rose as much as 0.3% to $1.3180 before erasing those gains. It was last flat on the day at $1.3125.

Against the euro the pound strengthened to 83.90 pence and was last up 0.2% to 84.12 pence.

British stocks <.FTSE> climbed higher after the purchasing managers index surveys for December came in better than economists had expected.

(Reporting by Tommy Reggiori Wilkes; Editing by Saikat Chatterjee)