Sept 10 Reuters Sterling edged up versus the dollar and the euro on Tuesday after UK labour data supported the view that the British economy was on a solid footing.

Pay growth cooled in the three months to July to a more than twoyear low, and employment shot higher, according to data on Tuesday, which is likely to keep the Bank of England on track to cut interest rates again before the end of the year.

Analysts said inflation was converging towards the Monetary Policy Committee39;s 2 target, while economic activity kept showing resilience, arguing that such a backdrop suggests a slow easing of monetary policy.

Investors will closely watch gross domestic product figures due Wednesday before this month39;s Bank of England meeting.

Sanjay Raja, senior economist at Deutsche Bank, said the UK economy was likely to expand by 0.3 monthonmonth after flatlining in June, as activity would rebound after a pickup in retail and leisure services.

Sterling rose 0.1 to 1.3085, after reaching 1.3107 earlier in the session.

The dollar edged down on Tuesday before U.S. inflation data and the televised U.S. presidential debate, which could affect expectations for the interest rate outlook.

This a resilient labour market and subsiding inflation should support the argument that while BoE cuts are coming, the pace of rate reductions should be relatively gradual, said Enrique DiazAlvarez, chief economist at global financial services firm Ebury.

The euro dropped versus sterling, trading…