Sterling was set for its worst week in four after below-forecast output and trade data capped a run of downbeat readings of Britain's economy,
The weak data added to questions over the Bank of England's shifting interest rate stance.
Data showing an unexpected contraction in British industrial output in May put sterling on the defensive from the start of European trade,
The pound then extended its losses against the dollar after a strong US labour market report.
The pound was down over 0.5% at $1.2879 this evening, having fallen as low as $1.2867.
It was 0.4% lower at 88.41 pence per euro.
ONS figures also flagged shrinkage in the UK manufacturing and construction sectors, and echoed surveys of purchasing managers earlier in the week that were tepid across the board.
Added to a widening trade deficit, the readings raised doubts about whether the Bank of England will follow through on recent hawkish rhetoric and soon raise interest rates that have stayed at record lows for 10 years.
Strategists have been split over how soon the Bank of England is likely to raise rates since Governor Mark Carney and chief economist Andy Haldane signalled a turn in the bank's thinking last week.
Those sceptical of an imminent rate rise cite reasons ranging from risks to an economy facing two years of Brexit negotiations, to the arrival of Silvana Tenreyro as a seemingly dovish member of the Bank's rate-setting committee.
Investors will look to next week's hearing on the Bank of England's latest inflation report for further clues on its willingness to look through a rise in prices that has shot past its 2% target.
Sterling also pulled back from a six-week high against the yen hit earlier in the day after the Bank of Japan expanded its purchases of government bonds, easing monetary policy.
Foreign exchange strategists are more optimistic about the pound versus the dollar than they were at the start of 2017, with a majority becoming either less bearish or more bullish, according to a Reuters poll.