Sterling extended losses versus the dollar on Thursday after UK industrial output data came in weaker than expected, adding the case for interest rate cuts from the Bank of England.

British manufacturing output fell 0.2 percent on the month after a 0.1 percent fall in November while analysts had forecast a 0.1 percent gain. At 0937 GMT the pound was trading at $1.9533, a two-week low from $1.9574 just before the data.

"Overall it doesn't change our view that the Monetary Policy Committee will cut rates by 25 basis points at lunchtime. But even so, it's disappointing to see a further contraction in the manufacturing sector, particularly given the relative weakness in sterling recently," said Philip Shaw, chief economist at Investec.

Sourced by Reuters.