Sterling hits 7-week low vs dollar after strong U.S. data

LONDON, July 31 (Reuters) - Sterling hit a seven-week low against the dollar on Thursday after U.S. labour costs posted their biggest rise in over 5-1/2 years in the second quarter, adding to the case for a rise in dollar interest rates sooner rather than later.

U.S. jobless claims released at the same time were up on a weekly basis, but the four-week average, considered a better gauge of labour market trends, fell to the lowest since April 2006.

The British pound fell to $1.7861 (GBP-D4) after the data from around $1.7876 beforehand and was down almost 0.3 percent on the day.

Sterling was already suffering after weak consumer confidence and house price data earlier on Thursday, putting it on course for its worst month in over a year after four straight weeks of losses in July. (Reporting by Jemima Kelly; Editing by Patrick Graham)