Rate view weighs sterling near record low vs euro

LONDON (Reuters) - Sterling steadied near a record low versus the euro on Thursday, with investors focused on deepening worries for the economy and expectations of further Bank of England interest rate cuts.

The pound has fallen some 10 percent this year as concern about the banking sector and the wider economy stemming from the global crisis in credit markets gathered pace.

Poor retail sales and housing data this week has put pressure on the pound, reinforcing expectations for further Bank monetary easing from the current 5 percent base rate.

The UK monetary policy outlook contrasts sharply with a hawkish ECB, set on fighting inflation.

"The general outlook is downbeat, there are interest rate cuts in the horizon, likely in June and there has been a negative newsflow so could see further weakness against the euro," said Geraldine Concagh, economist at AIB Group Treasury in Dublin.

By 9:16 a.m., the euro had reached 80.97 pence just off a record high of 80.98 pence set on Wednesday. It was last traded at 80.88, flat on the day.

The pound was also steady against the dollar at $1.9727.

The Bank will probably cut interest rates again before or at its June meeting after it lowered them on Thursday, seeking to head off a sustained economic downturn, a Reuters poll conducted earlier this month showed.

With eyes firmly on data, public sector borrowing figures on Friday will give more clues on the health of the economy.

(Editing by David Christian-Edwards)