LONDON, April 26 (Reuters) - European shares fell, German Bunds rose and sterling hit a two-month high against the dollar on Friday after data showed the U.S. economy grew less than expected in the first quarter.
U.S. gross domestic product expanded at a 2.5 percent annual rate, after growth nearly stalled at 0.4 percent in the fourth quarter of last year. The increase, however, missed economists' expectations for a 3.0 percent growth pace.
The FTSEurofirst 300 index of pan-European shares slightly extended losses after the U.S. data to trade 0.6 percent lower at 1,193.56 points. It was at 1,196 before the data release.
Bund futures rose to a session high of 146.63, up 43 ticks on the day following the data.
Sterling rose to a two-month high against the dollar of $1.5487 from around $1.5480 before the data was released and up 0.34 percent on the day.