* Sterling within half a U.S. cent of 31-year low
* PM May says EU divorce process to begin by March
* Deadline seen removing any doubts Brexit will happen
* UK manufacturing PMI easily beats forecasts
By Jemima Kelly
LONDON, Oct 3 (Reuters) - Sterling slid to a three-year low against the euro and to within half a cent of a 31-year trough versus the dollar on Monday, after a March deadline was set for the start of the formal process that will split Britain from the European Union.
British Prime Minister Theresa May told her Conservative party’s annual conference on Sunday that she was determined to move on with the process and win the “right deal”, in an effort to ease fears inside her party that she may delay the divorce .
Sterling, having just posted its worst run of quarterly losses since 1984, skidded more than 1 percent against the dollar to as low as $1.2845. That left it less than half a cent away from the 31-year low it reached in early July, shortly after the June 23 vote to leave the EU.
The pound also shed 1 percent against the euro to hit 87.48 pence, its weakest since August 2013.
While May dismissed the idea that Britain faced a choice between a “soft” or “hard” Brexit, some investment banks and analysts said her comments indicated the latter, meaning Britain could abandon the EU’s customs union and give up on seeking preferential access to the single market.
“The market seems to have been caught a little off guard by this speech from Theresa May over the weekend, which signalled that perhaps the starting point for negotiations is going to focus a touch less on the pursuit of single-market access than some had expected,” said BNP Paribas currency strategist Sam Lynton-Brown, in London.
“There’s been very little information given so far on the angle the government is going to take when it invokes Article 50, so for the time being the pound should remain very sensitive to any information we get, because it’s coming against the backdrop of a lot of uncertainty.”
Data showing British factory activity grew at the fastest rate in more than two years last month, boosted by a surge in export orders brought on by the slump in sterling, failed to push sterling back above $1.29.
Neither was the pound much stirred by comments from British Finance Minister Philip Hammond, who told the BBC on Monday that the country needed a new fiscal plan to navigate the economic turbulence caused by Brexit.
By 1050 GMT the currency was trading down 0.8 percent on the day at $1.2880 and at 87.25 pence per euro.
Triggering Article 50 of the EU’s Lisbon Treaty will redefine the country’s ties with its biggest trading partner.
“The fact that May has confirmed the timings for the triggering of Article 50 took away any lingering doubts and any lingering supportive elements for the currency, whereby ... we could pretend nothing was going on,” said UBS Wealth Management currency strategist Geoffrey Yu.
Elsewhere, the Norwegian crown hit a 14-month high of 8.9300 crowns per euro, as oil prices rose above $50 a barrel. The country’s central bank earlier this month left interest rates unchanged and said they could remain at that level for several years, which had helped lift the currency.
The euro steadied at $1.1237 after news that Deutsche Bank was attempting to negotiate a much smaller fine than the $14 billion the U.S. Department of Justice initially demanded, though no formal settlement has been announced yet.
For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by Tokyo markets team; Editing by Larry King)