Sterling slides as weak UK data fuels BoE rate cut bets

* Stg falls 2 pct vs dlr <GBP=>, euro <EURGBP=>

* UK manufacturing PMI at record low, mortgage lending falls

* BoE seen cutting interest rates further on Thursday

LONDON, Dec 1 (Reuters) - The pound shed two percent of its value against the dollar and euro on Monday after dismal UK manufacturing and mortgage lending data increased expectations that the Bank of England will slash interest rates on Thursday.

The pound fell along with UK stocks .FTSE, which lost nearly 3 percent, as investors bet that the ongoing deterioration in the global economy would herald another round of central bank monetary easing this week.

Data showed that UK mortgage lending slumped in October, mortgage approvals matched the lowest since the series began a decade ago and the manufacturing sector contracted at a record pace in November.

Investors are growing increasingly convinced that economic weakness and falling inflationary pressures will cause the BoE to plump for a substantial 100 basis point reduction in rates on Thursday to follow up November's shock 150 basis point rate cut.

"Most people in the market seem pretty convinced we will see a 100 basis point cut," Standard Bank's head of G10 currency research Steve Barrow said.

"Against a backdrop of weak stocks, the yen and the dollar are strengthening and we are seeing weakness in other currencies, with sterling suffering the most," he said.  Continued...