By Matthew Brown Jan. 22 (Bloomberg) -- The pound rose against the dollar before a report that is forecast to show U.K. retail sales grew last month at the fastest pace since June, adding to signs the economy emerged from the recession in the fourth quarter. The British currency traded within half a penny of the highest level against the euro since August. Retail sales expanded 1.1 percent from November, according to the median forecast of 27 economists in a Bloomberg survey. The economy expanded 0.4 percent in the fourth quarter from the previous three months, its first expansion since March 2008, a separate report is predicted to show on Jan. 26. “There’s a little bit of anticipation of a good retail sales figure,” said Adam Cole, head of global currency strategy at RBC Capital Markets in London. “For the next month or two sterling will outperform on positive macro data in particular.” The pound rose 0.4 percent to $1.6263 as of 9 a.m. in London. It was almost 0.1 percent stronger at 86.93 pence per euro and 0.3 percent higher versus the yen at 146.82. Two-year gilts rose for a second day, pushing the yield down 5 basis points to 1.18 percent. The 10-year gilt yield fell 3 basis points to 3.90 percent. To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net

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