LONDON, Feb 2 - Sterling firmed near 2-1/2 month highs against the euro on Monday after a key survey showed continued robust growth in UK manufacturing, keeping expectations of a rate hike this week on track. The latest CIPS/ purchasing managers' index showed the pace of expansion in British manufacturing held at a four-year high in January while order books surged to a new four-year peak. The index was unchanged from December at 56.0 in January, well above the 50.0 mark marking expansion, although the unchanged number broke a 10-month run of gains in the index and was a sliver below forecasts for 56.1 "Particularly with the prices being higher and the new orders being higher I would say it does seem to be bedding in the expectations that the Bank of England will be hiking interest rates Thursday," said Jane Foley, currency strategist at Barclays Capital.
Sterling firmed versus the euro after the survey was released and by 1000 GMT was near the day's high of 68.25 pence per euro . A push beyond 68.15 would take the pound to its strongest level since early November. Sterling was a touch lower against the dollar at $1.8220 , as the greenback was marginally firmer across the board. The input prices index of the survey rose to its highest level in 10 months in January, at 60.6 from a revised 56.6 in December. The output prices index, meanwhile, hit its highest level since February 2000, at 51.9. A poll conducted last week showed 43 out of 46 analysts surveyed expected the BoE to raise interest rates by 25 basis points to 4.0 percent at this week's Monetary Policy Committee meeting.///www.reuters.com