Soft data pushes sterling to all-time vs. euro

LONDON (Reuters) - The pound fell to an all-time low against the euro on Wednesday as weak consumer and business confidence and soft employment data reinforced the case for Bank of England rate cuts.

British consumer confidence fell to its worst since comparable records began four years ago, according to a survey from Nationwide.

Sentiment at British services firms reached its lowest point in 15 months, and permanent job appointments in Britain fell for the first time in nearly five years last month, another report showed.

Markets are now pricing in three cuts from the Bank by the end of the year, which would take rates to 4.5 percent, while bets for near-term policy easing by the European Central Bank have been pared back in recent weeks.

"Yet again the data is an indication that the UK economy is slowing, that puts further pressure on the MPC," said Jeremy Stretch, strategist at Rabobank. "It's a case that sterling continues to be seen as the ugly sister to the dollar."

By 8:24 a.m., the euro had reached 76.87 pence, its highest since the currency was launched in 1999 and up more than 4 percent so far this year.

The pound fell to a one-week low against the dollar of $1.9748, down more than half a percent on the day.

Sterling could take a further knock today if services PMI data due at 9:30 a.m. come in softer than expected. Economists polled by Reuters forecast a median figure of 52.1.

"Any sign of weakness ... will highlight the UK's vulnerability to the ongoing financial market correction thereby boosting speculation over pending rate cuts, weighing on GBP," RBC Capital Markets said in a note to clients.