* Stocks fall, MSCI world index down 0.9 pct

* Metal prices fall, but oil rises on Mideast violence

* Sterling rises after BOE delivers rate cut

By Dominic Lau

LONDON, Jan 8 (Reuters) - World stocks and metal prices fell on Thursday after bleak data and poor corporate earnings fuelled gloom about the economic outlook, while sterling rose after the Bank of England cut interest rates to a record low.

The BoE cut borrowing costs by 50 basis points to 1.5 percent as expected amid signs Britain is heading for a deep recession.

The financial crisis, triggered by a meltdown in the U.S. subprime mortgage market, has spread far and wide with the ensuing economic slowdown leading to higher unemployment and slowing exports. Sterling rose about two U.S. cents to $1.5247 GBP= and firmed to a three-week high against the euro EURGBP=.

"I think it's pretty likely that it was sterling that decided them to slow down the pace of cuts," said Brian Hilliard, economist at Societe Generale. "I still think there's more (monetary easing) in the pipeline.

The euro EUR= fell 0.6 percent to $1.3569 but the dollar slipped more than 1 percent against the yen JPY= as falling share prices sapped demand for risky investments.