Sterling hits 3-mth high vs broadly weak dollar

* Sterling hits 3-mth high vs dollar of $1.6801 GBP=D4

* Perceived BoE end to QE, broad dollar weakness lift pound

* Kraft seen formalising Cadbury takeover bid

* Trade-weighted sterling at near 8-week high

LONDON, Nov 9 (Reuters) - Sterling hit a three-month high against a broadly weaker dollar on Monday as the greenback came under broad selling pressure on the view that U.S. interest rates will stay low for some time.

The UK currency continued to gain after the Bank of England last week opted to increase its quantitative easing programme by 25 billion pounds, which investors believe is likely to mark a final top-up.

The anticipation of sterling-positive M&A news also lifted the currency as sources said Kraft Foods Inc (KFT.N) was seen formalising a hostile takeover bid, valued at roughly 10.2 billion pounds, for Britain's Cadbury Plc (CBRY.L) on Monday. [ID:nN08213524] [ID:nN08337848]

There was little in the way of UK data due, with focus this week on Wednesday's quarterly Inflation Report from the Bank of England, which will set out its latest forecasts for growth and prices. [ID:nL645014]

"The BoE meeting is out of the way, we know what it is doing in terms of QE. Although we'll be looking to see what's in the Inflation Report later this week, certainly that big risk factor has now gone for sterling," said Geraldine Concagh, economist at AIB Group Treasury in Dublin.