Sterling falls to 2-1/2 month low as data weighs

LONDON, May 7 (Reuters) - Sterling fell to a 2-1/2 month low versus the dollar on Wednesday with weak consumer morale and jobs data keeping investor focus on a sharply slowing UK economy and the prospect of more interest rate cuts.

British consumer morale fell in April to its lowest since records began four years ago, according to data from the Nationwide Building Society [ID:nL06938733].

By 0730 GMT the pound had fallen to $1.9594, its lowest since late February <GBP=>.

"I have no problem with the argument that the UK economy is destined to have a hard time," said Simon Derrick, head of currency research at Bank of New York Mellon.

"Recent housing data and the consumer confidence data mean that we are all aware of where the UK economy is going." (Reporting by Simon Falush)