Sterling hits 1-mo low vs dlr,weak UK data stings

* Sterling hits 1-mth low vs dollar, smarts after UK data * Traders brush off rise in UK consumer confidence * Traders await BoE, report on UK banking sector

LONDON, July 8 (Reuters) - Sterling extended its losing streak on Wednesday, hitting a one-month low against the dollar after weak UK manufacturing output data the previous day further clouded optimism that the economy may be improving.

Brushing off figures on Wednesday showing a rise in British consumer confidence, the UK currency continued to smart from Tuesday's unexpected fall in output, and was on track to post its fifth straight day of losses.

Figures on Wednesday also showed a monthly slide in UK house prices in June, but they had limited impact on the market as a fall was widely expected.

"There was some consumer confidence data earlier today which was stronger, but the main issue is the manufacturing figures from yesterday, which is keeping sterling weak," said Adarsh Sinha, currency strategist at Barclays Capital in London.

The Bank of England begins a two-day policy meeting on Wednesday, while later in the day the government will release its outline of measures to prevent another crisis in the financial services industry.

The central bank is widely seen holding interest rates at a record low 0.5 percent on Thursday, but market participants said sterling may come under more selling pressure if it signals it may increase its asset purchase programme.

Sterling GBP=D4 fell as low as $1.6046, its weakest since June 9, before pulling back slightly to $1.6084, down 0.3 percent on the day.