LONDON, April 25 Reuters The pound fell on Tuesday, in line with a decline in a number of European currencies, as nervousness around the outcome of the earnings season and the outlook for the global economy gave the dollar an edge.

In UK news, Britain recorded a biggerthanexpected budget deficit of 21.53 billion pounds 26.87 billion in March, official data showed on Tuesday, capping off the fourthhighest borrowing for a financial year since records started.

A Reuters poll of economists had pointed to public sector net borrowing, excluding stateowned banks, of 20 billion pounds.

Sterling on Tuesday was trading down 0.2 against the dollar at 1.2463 and down 0.1 against the euro at 88.53 pence.

The pound has been one of the strongest performing major currencies against the dollar so far this year, with a gain of 3.1, neckandneck with the euro for second place behind the Swiss franc , which has climbed nearly 4.5.

Inflation running at a surprisingly hot 10.1 in March and evidence of solid service sector demand have prompted many to reassess how much more the Bank of England may have to raise rates this year.

We still think that markets are overestimating the amount of further tightening 71 basis points in total, including next weeks hike, before reaching the peak, but unless there is a clear pushback by the BoE at the policy meeting, the pound may not lose its solid momentum just yet, ING39;s Francesco Pesole said.

Money market rates show traders believe there is a…