Stg hits session lows vs dlr; King hints at big rate cuts

LONDON Nov 25 (Reuters) - Sterling fell to a session low versus the dollar on Tuesday after Bank of England Governor Mervyn King said the bank may need to cut rates by more than they would otherwise as banks are slow to pass cuts on.

King was giving testimony to the UK parliament's Treasury Select Committee. By 1035 GMT, the pound was down half a percent on the day, having hit a session low of $1.5060 GBP=.

"The market has priced in around 1.4 percent of rate cuts for next year, and given King's comments, it's just gotten a bit spooked that there could be more," said a London-based trader.

(Reporting by Naomi Tajitsu and Veronica Brown)