Sterling extends losses vs dlr after UK jobs data

LONDON, May 14 (Reuters) - Sterling extended losses towards an earlier three-month low versus the dollar on Wednesday after rises in UK earnings growth and in unemployment benefit claims highlighted the dilemma facing the Bank of England.

A slowing economy points to the need for interest rate cuts, while price pressures limit the scope for monetary easing.

For more on the UK jobs data see [nONS003525]

Sterling fell to around $1.9408 after the data, from $1.9450 previously. Earlier it hit a near three month low of $1.9392 <GBOP=>.

"The devil is in the details, and it is disapponting with regard to the jobless claims creeping higher than expectations," said Paul Mackel, director of currency strategy at HSBC Markets.

"It raises the debate over whether are we seeing a turning point in global market conditions ... and whether financial market weakness is starting to affect the UK labour market."

Next, the focus turns to the Bank of England's quarterly inflation report at 0930 GMT.

(Reporting by Naomi Tajitsu and Toni Vorobyova)