Sterling aided by bounce in British consumer confidence

LONDON, Jan 30 (Reuters) - Sterling inched up against the dollar on Friday, helped by a bounce in British consumer confidence, although gains are likely to prove temporary as UK bonds yields stay anchored near record lows.

British consumer morale jumped by more than expected in January to reach a five-month high. The survey's headline index rose to +1 in January, matching the highs hit in mid-2014 and up from December's nine-month low of -4. Economists polled by Reuters had expected a smaller rise to -2.

Sterling rose 0.1 percent at $1.5070, while it was slightly lower against the euro. The euro was up 0.1 percent at 75.25 pence.

"Even (Taiwan OTC: 6436.TWO - news) though the economic data in UK points to growth, investors are wary because there is political uncertainty on the horizon," said Marshall Gittler, Head (Other OTC: HEDYY - news) of Global FX Strategy at IronFX Global Limited.

May's general election looks set to be the closest in modern times, pointing to deep uncertainty over the shape of government and policy thereafter. That is starting to worry investors and keeping them wary of the pound.

Sterling has also suffered in the past six months as investors have pushed back their bets on when the Bank of England will raise rates. The 10-year gilt yield dropped below 1.4 percent for the first time ever on Thursday, reflecting a view that rates in UK will stay lower for longer.

BoE Chief Economist Andrew Haldane on Wednesday reiterated the message that the BoE was in no rush to raise interest rates and that when hikes do come, they will be gradual, perhaps as little as a half percentage point rise each year. (Additional reporting by Anirban Nag; Editing by Toby Chopra)