Sterling eased versus the euro and dollar on Thursday after weak UK housing data reinforced expectations for more interest rate cuts.

British house prices fell at their fastest rate since May 2005 in the three months to November and surveyors' confidence in the outlook hit its lowest level since records began in 1998, according to the Royal Institution of Chartered Surveyors.

The data reinforced expectations that last week's Bank of England rate cut to 5.50 percent would be followed by more monetary easing before too long.

"We may see a bit more strength coming through in terms of euro/sterling. The RICS survey was pretty abysmal but few people can be surprised by abysmal data out of the housing market right now," said Steve Barrow, currency strategist at Bear Stearns.

By 0754 GMT, sterling was down 0.2 percent at $2.0432. The euro was a third of a percent higher at 72.07 percent.

The pound was also down 0.7 percent at 227.84 yen, retreating from one-month highs above 230 set the previous session.

Sterling also suffered a little as risk appetite abated and markets turned more cautious on liquidity boosting measures announced by major central banks on Wednesday.

The Confederation of British Industry's industrial trends survey is due at 1100 GMT, while BoE Monetary Policy Committee member Paul Tucker speaks at 1400 GMT.

Source Supplied by Reuters.