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Sterling steady before retail sales data

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

LONDON, April 18 (Reuters) - Sterling steadied on Thursday as traders prepared to see if British retail sales data could shake the currency out of a recent slumber.

European Union leaders last week granted Britain an up to six-month delay to Brexit.

The move ended a bout of wild swings in the pound and the currency is now at its least volatile in years as investors await a breakthrough in the EU divorce process.

The Bank of England has signalled it will lift interest rates to stop inflationary pressures from building, but it is highly unlikely to act until Brexit is resolved.

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British retail sales data is forecast to come in at a fall of 0.3 percent in March and up 4.6 percent year-on-year, according to a Reuters poll of analysts.

"Economic data have not moved the pound much in recent weeks, though today's March retail sales are worth watching. Sales have been volatile in recent months," said Adam Cole, chief currencies strategist at RBC.

The data is expected to be bleak partly because consumer spending stalled ahead of the original March 29 Brexit deadline.

At 0800 GMT sterling was down 0.1 percent against the dollar at $1.3023 and flat against the euro at 86.54 pence .

On Wednesday, a report in the Guardian newspaper that talks between the Labour opposition party and the ruling Conservatives had stalled sent the pound tumbling. A spokesman for the Labour party denied talks had hit an impasse.

Implied volatility in the pound has fallen sharply as investors reduce their bets on the currency moving significantly one way or the another. (Reporting by Tom Finn; Editing by Andrew Cawthorne)