Sterling falls, gilt futures pare loss on UK mfg PMI

LONDON, Sept 1 (Reuters) - Sterling hit a three-week low against the euro and cut gains against the dollar while gilt futures pared losses on Wednesday after a UK purchasing managers' survey came in sharply lower than expectations.

The Markit/Chartered Institute of Purchasing and Supply Manufacturing PMI fell to 54.3 in August -- below all forecasts in a Reuters poll -- from a downwardly revised 56.9 in July. That was the lowest level since November last year although it was still above the 50 mark which separates growth from contraction in activity. [ID:nSLAVJE6BA]

The euro rose to 83.02 pence EURGBP=D4, its highest since Aug. 11, according to Reuters charts.

The pound fell some 60 pips against the dollar to $1.5345 GBP=D4, flat on the day.

The December gilt future FLGZ0 halved early losses to 125.14, down 12 ticks on the day, having stood at 125.01 before the data.

The 10-year gilt yield eased to 2.84 percent, having been 2.85 percent beforehand. (Reporting by London markets team)