Sterling gains ahead of BoE meeting

LONDON, Sept 23 (Reuters) - Sterling rose on Thursday along with most risk currencies as concerns over the Evergrande debt crisis eased and traders waited for the Bank of England meeting and signals for the outlook for policy tightening.

The pound had fallen this week as panic that Chinese developer Evergrande would default on its debts sent investors into safer assets and currencies.

Attention now turns to the BoE rate decision, due at 1100 GMT.

Rate-setters meeting are unlikely to vote for an early end to COVID-19 stimulus, especially after Britain's economic growth slowed unexpectedly in July and consumer price inflation saw a record jump to a nine-year high.

Markets have responded to the inflation numbers by bringing forward rate hike expectations off the record 0.1% low to May 2022.

Investors will now be watching closely for any signs that BoE policymakers do not view the rise in price growth quite as transitory after they previously said inflation could temporarily hit 4% by year-end.

Some analysts said the U.S. Federal Reserve's hawkish tone in Wednesday's policy update has also raised expectations the BoE might not sound as dovish as previously as central banks globally plot a path out of pandemic-era stimulus.

"In light of the recent hawkish repricing of BoE rate hike expectations, market participants will be closely scrutinizing the updated policy communication today for any signal that the BoE is moving closer to raising rates," MUFG analyst Lee Hardman said in a note.

"However, we believe that there is greater risk of disappointment which could trigger a temporary correction lower for the GBP. We expect the BoE to mainly stick to the policy message from August when they formally adopted a gradual tightening bias."

The pound was last up 0.2% at $1.3648 and against the euro it was flat at 85.85 pence.

(Reporting by Tommy Wilkes; Editing by Angus MacSwan)