Sterling pressured by worries over UK economy

* Sterling down 0.3 percent at $1.9691 <GBP=>

* Data underlines UK economic slowdown scenario

LONDON, July 8 (Reuters) - Sterling edged lower versus a broadly firm dollar on Tuesday after data on British companies and the housing sector underlined the gloomy economic outlook.

Sterling was also pressured by a pick up in risk aversion, illustrated by a sharp fall in the FTSE 100 .FTSE index of leading UK shares.

A survey of nearly 5,000 businesses by the British Chamber of Commerce showed firms facing their worst cashflow situation since records began in 1992, with the downturn particularly evident in the service sector [ID:nL0716206].

There were also further signs of a slowing property sector in Britain, where two-thirds of the population own their home.

Government figures showed annual house price inflation slowing to 3.7 percent in May, while Persimmon (PSN.L: Quote, Profile, Research), the country's biggest house builder by market value, cut over a quarter of its workforce and said the market remained difficult.

"All the signs are that the UK economy is heading towards a recession," said Ian Stannard, senior foreign exchange strategist at BNP Paribas.

"Sterling is now responding to this deteriorating outlook in the UK and I think we will see it under increasing pressure." By 1411 GMT, sterling was down 0.3 percent at $1.9691 <GBP=>. It hit a one-week low at 210.28 yen <GBPJPY=R>.