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Sterling dips after BoE's Shafik flags rate cut possibility

(Recasts after Shafik comments, new quote)

By Jemima Kelly

LONDON, Sept 28 (Reuters) - Sterling dipped on Wednesday after a Bank of England policymaker said she expected the central bank would "at some point" need to add more monetary stimulus to Britain's economy to cushion the blow dealt by Brexit.

BoE Deputy Governor Minouche Shafik - who will be stepping down from the bank's monetary policy committee next year - said a 2016 rate cut would hinge on economic data, but that she would rather act pre-emptively than "be on the back foot and do too little too late".

Shafik's comments contrasted with those of fellow MPC member Kristin Forbes, who last week said she saw no case for a further rate cut.

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They also struck a less upbeat tone than Governor Mark Carney, who said in a newspaper interview on Wednesday that the long-term prospects for the British economy were positive, helping push sterling as high as $1.3032 in early European trading.

By 1430 GMT, sterling was trading down 0.1 percent on the day at $1.3012. Against the euro, it was also down 0.1 percent at 86.18 pence.

"The dip was because she (Shafik) put out a strong signal that easing is likely at some point, and (markets) aren't fully pricing that in," said ING currency strategist Viraj Patel.

"It looks like a rate cut is in the balance - we'll need a couple more big data points to come through as the deciding factors...that's the tone Deputy Governor Shafik struck today. I think that's where most of the committee members sit - I think Forbes last week was an outlier."

Britain's Trade Minister Liam Fox told the World Trade Organisation on Tuesday that Brexit would not create a legal vacuum even though Britain would now pursue "a more liberalised trade agenda in the future".

Markets had been bracing for Fox's speech to point towards a "hard Brexit", a total split from the EU and its single market, that some fear could drive an exodus of banks from London, and some analysts said his softer tone had lifted sterling late on Tuesday.

But others, like HBSC's Dominic Bunning, said the move higher in sterling since Monday's low of $1.2916 amounted to nothing more than a modest correction, having fallen 4 percent in three weeks.

"We're still very much in the broad post-referendum range - we were getting to the bottom of that range around $1.29, so around there you're going to get people coming in and expecting a bit of a bounce," Bunning said.

The first forecasts for the pound after the EU referendum were almost universally bleak. A number of major banks predicted a fall to around $1.20, levels not seen since the Plaza Accord's move to weaken the dollar in the mid-1980s.

But the pound has so far held up better than that, bottoming out in early July at $1.2798, still a 31-year low but much firmer than those forecasts anticipated. (Editing by Mark Trevelyan)