Sterling slides, pressured by BoE rate cut expectations

* Sterling slides, pulls away from 2-wk high vs dollar * Pound stung on expectations for BoE rate cut this week * Weak UK shares push sterling lower

LONDON Feb 2 (Reuters) - Sterling fell broadly on Monday on speculation that the Bank of England will cut interest rates this week, which pulled the UK currency away from a two-week high hit against the dollar last week.

Also putting sterling under selling pressure was a slide in UK shares, reflecting the parlous state of the British economy.

The Bank of England will hold a policy meeting this week, and many in the market expect the central bank to cut rates by 50 basis points to 1.0 percent.

"The move this morning is dominated by talk about interest rate cuts in the UK this week," said James Hughes, market strategist at CMC Markets in London.

"Sterling's downside this week will depend on how much of a BoE rate cut the market will factor in."

The European Central Bank also holds a policy meeting this week but its policymakers have already signalled that the next move in rates, now at 2.0 percent, will not come before March.

The potential for a growing rates differential helped push sterling lower.

Sterling GBP=D4 fell 1.75 percent to $1.4250, retreating from $1.4530 touched on Friday, its strongest since mid-January.

A 1.5 percent fall in UK shares .FTSE helped to pressure the pound lower.

The euro EURGBP=D4 rose 1.6 percent to 89.34 pence, recovering from 88.04 pence hit late last week. The pound fell 2.5 percent to 126.95 yen GBPJPY=R.

The UK currency had climbed on Friday, when data had shown a rise in mortgage lending and a surprise increase in home loan approvals. (Reporting by Naomi Tajitsu, editing by Mike Peacock)