Sterling edges up vs dlr but sentiment shaky

* Sterling up 0.1 percent at $1.5618 GBP=

* UK retail sales drop on Jan, house prices rise

* Poll suggests hung parliament after election

LONDON, Feb 9 (Reuters) - Sterling edged up from multi-month lows against the dollar on Tuesday as traders covered short positions but sentiment toward the UK currency remained shaky.

Mixed economic data, concerns about sovereign debt risk and political uncertainty all weighed on the pound.

Data on Tuesday showed British retail sales recorded their worst performance for the month of January in at least 15 years, even as separate figures showed house prices extended their recent rise. [ID:nLDE617292]

UK December trade data, due at 0930 GMT, will be watched for hints of a clearer picture of fourth quarter growth, analysts said. An initial reading of gross domestic product showed the economy emerged from recession in the three months to December but only just, growing by 0.1 percent.

"The UK trade balance may help the pound if exports rise, but a weak BRC sales report overnight indicates the consumer remains vulnerable," said Stuart Bennett, currency analyst at Credit Agricole CIB.

The British Retail Consortium said the value of like-for-like sales last month was 0.7 percent lower than a year ago. That followed a 4.2 percent annual rise in December.

Separately, the Royal Institution of Chartered Surveyors said its monthly house price balance -- which represents the net percentage of surveyors who report higher rather than lower house prices -- rose to +32 in January from +30 in December.

That was well above the consensus forecast of +28 and not far from November's three-year high of +35.

At 0832 GMT, sterling was at $1.5619, up 0.1 percent on the day GBP=D4. It hit a 8-1/2 month low of $1.5535 on Monday.

Data from the Commodity Futures Trading Commission last Friday showed currency speculators had increased their net short positions to 33,968 in the week ended Feb. 2 from 27,153 the week before. [ID:nN05162244]

The euro was up 0.3 percent at 87.85 pence EURGBP=D4, not far from a two-week high of 87.98 pence hit the previous day.

Concerns over Britain's mounting debt hurt the pound, as the euro zone faced a crisis of confidence over some of its debt-laden smaller countries such as Greece and Portugal.

The euro saw some short-covering on speculation about a rescue plan for Greece after European Central Bank President Jean-Claude Trichet left a central bankers' gathering in Sydney early to attend an European Council meeting. [ID:nSGE6170O9]

HUNG PARLIAMENT

Speculation a general election due by June may result in a hung parliament also kept the pound on the back foot.

A Populus poll for the Times newspaper published on Tuesday found support for Prime Minister Gordon Brown's Labour Party up two points from last month at 30 percent, while the centre-right opposition Conservatives were down one point at 40 percent.

The projections, in line with other recent polls, suggest the Conservatives would be three seats short of an overall parliamentary majority if repeated in an election due by June, the paper said. [ID:nLDE61800F]

(Reporting by Tamawa Desai, editing by Nigel Stephenson)