Sterling on the back foot; UK GDP in focus

* Sterling down 0.2 pct at 79.05 pence per euro <EURGBP=>

* Markets alert for GDP figures after run of poor data

increases recession talk

LONDON, July 25 (Reuters) - Sterling fell against the euro and hovered near two-week lows versus the dollar on Friday after a run of poor economic data strengthened the case for an eventual growth-stimulating Bank of England rate cut.

After data on Thursday showing the biggest slump in UK retail sales in over two decades, investors were poised for a GDP release at 0830 GMT that could weigh further on sentiment with fresh evidence of a sharply slowing economy.

Analysts polled by Reuters expect UK second-quarter growth of 0.2 percent, down from 0.3 percent in the previous quarter, with the annual rate seen at a sharply lower 1.6 percent.

"There is talk in the market that the GDP numbers could come in weaker than expectations and that growth might even come in flat," AIB Group Treasury economist Geraldine Concagh said.