* Sterling climbs vs dollar, supported vs euro * Support from BoE minutes showing move towards rate rise * Analysts: Minutes should be put in context of weak GDP LONDON, Jan 27 (Reuters) - Sterling rose against the dollar on Thursday as it continued to draw support from expectations the Bank of England could raise interest rates by mid-year, while broad dollar weakness also bolstered the UK currency. The pound also jumped against the yen, which came under broad selling pressure after ratings agency Standard & Poor's cut Japan's sovereign debt rating by one notch to AA minus. [ID:nL3E7CR0MQ] Sterling has found support after minutes of the Bank of England's January meeting on Wednesday showed BoE policymaker Martin Weale joined Andrew Sentance in voting for a 25 basis point rate rise from a record low 0.5 percent. Analysts said the additional vote to raise rates prompted investors to price in the rising likelihood of an increase in coming months. However, some said weakness in the UK economy, highlighted by news this week of a shock contraction in UK gross domestic product late last year, would cap the pound's gains. "The market is literally reading the minutes as hawkish, and not reading in the context of the weak GDP print," said Chris Walker, currency strategist at UBS, adding that broad weakness in the dollar was also boosting the UK currency. But he added: "King's speech after the GDP print and the weak GDP itself suggest that the analysis of the minutes should be put into context a bit." Walker was referring to a speech by BoE Governor Mervyn King on Tuesday, when King said any decision to raise interest rates would be based on longer-term goals, while acknowledging that UK consumer prices would probably rise further in the coming months. [ID:nSLAPCE7NL] Some analysts argue that an ongoing rise in price pressures while the economy struggles to recover raises the possibility of stagflation, which would also be negative for the pound. By 1212 GMT, sterling GBP=D4 had climbed 0.4 percent on the day to a session high of $1.5971, boosted by broad weakness in the dollar, which slipped 0.2 percent against a currency basket .DXY. The pound has recovered steep losses earlier in the week, which saw it fall to $1.5750 hit on Tuesday after figures showed the UK economy contracted 0.5 percent in the fourth quarter, shocking markets which had been expecting slight growth. Technical analysts said the UK currency was supported around $1.5750, while its 100-day moving average at $1.5771 also provided a buffer. Implied interest rate futures based on overnight index swaps were pricing in a roughly 45 percent chance of a 25 basis point rate rise by May BOEWATCH, unchanged from late on Wednesday.

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