Sterling hit a one-week low against the dollar and slipped versus the euro on Monday after data showed a surprise fall in UK September output prices. Against a forecast for a rise, output prices unexpectedly fell 0.3 percent from a month earlier.
Input prices fell a bigger-than-expected 1.8 percent in the same month, dropping at their sharpest monthly rate in nearly two years, due to lower oil prices.
Analysts say the data weighed on sterling in an otherwise quiet session but did little to change market expectations that the Bank of England would raise interest rates to 5 percent in November.
"Today's PPI may prove marginally negative for sterling, but it will be next week's releases on CPI, retail sales, GDP and MPC minutes that provide the real insight into the likely outcome of November's MPC," said Daragh Maher, currency strategist at Calyon.
By 1410 GMT the pound fell to the low of $1.8635, down around 0.3 percent on the day. It is still up more than 8 percent since January. Against the euro it was also down around 0.3 percent at 67.63 pence.
On the trade-weighted index it fell to 102.6.
Data showed UK house price inflation rose 7.7 percent on the year in August to a 17-month high.
A leading think tank said Britain's economy grew by just 0.4 percent in the three months to September compared with the prior three months, lessening the chance of a November rate hike.
The National Institute of Economic and Social Research also halved its earlier growth estimate for the three months to August to 0.4 percent.
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