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Pound pressured as Brexit timetable blocked, election risk grows

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

LONDON, October 23(Reuters) - Sterling slipped on Wednesday further off recent highs around $1.30 after the British parliament voted to approve the withdrawal deal but rejected the tight timetable to legislate on the deal in time for the Oct. 31 deadline.

British Prime Minister Boris Johnson told parliament that if it defeated him on the timetable and forced a delay until January he would abandon his attempt to ratify the deal and push for an election before Christmas instead. That led investors to price in elections and Brexit delay.

"Sterling retraced some of its gains again last night after many optimists had to realise that the hope of a happy end next week has now died," Commerzbank analyst Antje Praefcke told clients.

"However, as the extension means that we are entering a new round and as a hard Brexit is unlikely the losses are likely to be limited short term. Sterling will probably remain at its comparatively high levels for now and wait for things to come."

Sterling was unchanged against the dollar by 0900 GMT after falling 0.62% on Tuesday. Against the euro, sterling fell 0.1%, last trading at 86.44 pence.

Two-week implied volatility on sterling - a contract that captures the Oct. 31 Brexit deadline, continued to fall, indicating there is little fear of a no-deal Brexit around that date. It was trading around 11.3%, the lowest since Oct. 10 .

However, the renewed uncertainty especially around possible elections, boosted British government bonds, pushing 10-year yields more than 5 basis points lower to the lowest since Oct. 16.

RBC analysts said that if the European Union granted the UK an extention, as seems likely, the pound would reverse the most recent losses. But they added:

"If we are heading for an early election, expect further, but limited, downside." (Reporting by Elizabeth Howcroft, Editing by Angus MacSwan)