The pound fell to session lows versus the euro and the dollar on Wednesday, while UK rate futures ticked higher after Bank of England minutes showed that two of the nine policymakers favoured a rate cut this month.

Weaker-than-expected average earnings data, released at the same time as the minutes, also fuelled the market moves. Easing inflationary pressure were seen to give the BoE more room to cut rates in the future. "The minutes confirmed an easing psychology from the MPC...and softer than expected labour market figures reopen the case for a cut in rates as early as April, which is why sterling has fallen," said Audrey Childe-Freeman, European economist at CIBC World Markets.

By 0939 GMT, the pound had fallen as low as $1.9989, down from around $2.0069 before the minutes and the data.

The euro was up more than 1 percent on the day at 78.71 pence. UK interest rates futures rose after the minutes and data, as traders moved to price in lower interest rate from the Bank over the coming months.

Short sterling extended gains to trade as much as 10 ticks up on the day compared with 5-8 ticks up across the 2008 strip beforehand. SONIA contracts indicated traders expect cuts of almost 50 basis points by the end of the second quarter.

Britain's FTSE 100 .FTSE stayed weak, down 0.9 percent.

Sourced by Reuters.