Sterling gains on UK services data; BoE awaited

* Sterling hits 1-week high vs euro; up 0.9 pct at $1.6580

* UK services sector PMI hits highest since Aug 2007

* Risk aversion eases as equity markets rebound

* More QE eyed at BoE on Thursday but outcome uncertain

By Tamawa Desai

LONDON, Nov 4 (Reuters) - Sterling rose on Wednesday after data showed a higher-than-expected increase in UK service sector activity and as a rebound in equity markets eased risk aversion ahead of a Bank of England policy decision on Thursday.

A purchasing managers survey showed its services sector index rose to 56.9 from 55.3 in October, the highest since August 2007, helped by growth in new orders. [ID:nLAG005896]

"It's a storming set of numbers. If you take the services survey with the pick-up in manufacturing earlier in the week, it does cement the view that we will get a recovery in the fourth quarter," said Brian Hilliard, economist at Societe Generale.