(Reuters) - Sterling rose to a two-month high against the dollar on Wednesday, helped by better UK employment data which suggested the economy continues to emerge from recession and boosted hopes for a sustainable recovery. Figures showed the number of people claiming unemployment benefit in Britain fell to its lowest in over a year in June, while the number in work jumped at its fastest in four years, helped by a record rise in part-time work. This was the trigger for investors to push sterling to a two-month high versus the dollar at $1.5292. By 4:36 p.m. it was up 0.7 percent on the day at $1.5278. "The data was a reason for people to see if they could take sterling a bit higher. But trade is very summer-like, there is not a lot of direction and people are quick to take risk off the table," said Paul Robson, currency strategist at RBS. A dent to equities took some of the shine out of sterling, with the UK FTSE 100 index down 0.4 percent .FTSE as concerns about the banking sector outlook weighed on financial stocks. .L Technical analysts said resistance in sterling against the dollar came in next at $1.5310, the trendline from the November 2009 highs of $1.6880. The euro fell 0.3 percent against the pound to 83.59 pence, as the single currency stayed below a six-week high near 84.20 hit on Monday. "I see euro/sterling trending lower in the longer term. The key to that happening will be whether UK data shows enough improvement to swing the Bank of England round," said Ray Farris, chief currency strategist at Credit Suisse. BoE Monetary Policy Committee member Andrew Sentance said on Tuesday that the BoE should start raising rates because economic conditions were improving, while adding that any tightening should be only gradual. RECOVERY CONCERNS Analysts said that whilst the labour data was encouraging, there were nagging doubts over the outlook for the economy, particularly as a survey by Nationwide showed UK consumer confidence souring further in June. "Unemployment may very well continue to fall in the near term, but there is a very real danger that it will start to head back up later this year and then increase in 2011," said Howard Archer, economist at IHS Global Insight. The Conservative-Liberal Democrat coalition has announced hefty cuts to government spending and tax rises to try to rein in a record budget deficit, raising fears Britain's fragile economic recovery will struggle to gain momentum. "There are some worrying signs on consumer confidence and the housing market and sterling's rally could run out of steam," said BNP Paribas currency strategist Ian Stannard. (Additional reporting by Neal Armstrong, graphic by Scott Barber; Editing by Susan Fenton)

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