Sterling slips vs dlr, pressured by economic outlook

* Sterling down 0.2 percent at $1.9711 <GBP=>

* BCC survey shows UK firms facing worst cash flow on record

* UK housing sector, economy outlook remains bleak

LONDON, July 8 (Reuters) - Sterling edged lower versus a broadly firm dollar on Tuesday after a survey of UK companies underlined the gloomy economic outlook.

Sterling was also pressured by a pick up in risk aversion, illustrated by a slump of over 2 percent in the FTSE 100 index of leading UK shares.

A survey of nearly 5,000 businesses by the British Chamber of Commerce showed firms facing their worst cashflow situation since records began in 1992, with the downturn particularly evident in the service sector [ID:nL0716206]. The BCC said the results showed a "real risk of recession".

"It (the data) increases the likelihood of an interest rate cut being the next move and it coming a bit sooner than people previously thought," said Paul Robinson, chief sterling strategist at Barclays Capital.

"But it's not really changing the picture -- the UK (already) looked fairly depressing beforehand," he said. By 0706 GMT, sterling was down 0.2 percent at $1.9711 <GBP=>. It hit a one-week low at 210.47 yen <GBPJPY=R>. The euro was steady at 79.51 pence <EURGBP=>.

Persimmon (PSN.L: Quote, Profile, Research),Britain's biggest house builder by market value, said the market remained difficult but it did not expect significant writedowns of the value of its land holdings.