* Bean comments add more fuel to rate rise expectations
* Breaks above $1.70 for first time since August 2009
* BoE meeting minutes on Wednesday may confirm sea change
LONDON, June 16 (Reuters) - Britain's pound topped $1.70 for the first time since August 2009 on Monday, adding to gains made since the head of the Bank of England surprised markets last week by hinting that interest rates could rise this year.
A rapidly improving UK economy has made sterling one of the past year's biggest winners on major currency markets but until Governor Mark Carney's comments on Thursday - seen as a reversal of his previous dovish stance - doubts had been creeping in.
An interview given by Carney's deputy, Charlie Bean, on Sunday added fuel to market speculation that the balance of opinion on the bank's seven-strong policy committee may be fast changing in favour of raising the premium for holding sterling.
Bean said he was optimistic about growth and would welcome the bank's starting to "normalise" interest rates. Many analysts now expect the minutes of the bank's June meeting on Wednesday to show at least one member backing an immediate hike.
"All of these remarks do suggest the tide is turning at the Bank of England," said Jane Foley, a currency strategist with Rabobank in London. "Whether that means that a hike by the end of this year is on the cards, we are not sure. But these minutes may go some way to showing us."
Many economists say privately that the bank will be reluctant to raise rates close to parliamentary elections next May which look set to be as tightly fought as 2010 polls which generated Britain's first hung parliament in decades.
With Finance Minister George Osborne's Conservatives promising more spending cuts and facing threats from populist anti-EU party UKIP and the main centre-left Labour opposition, the outcome of the election may prove important for the BoE's assessment of fiscal policy prospects.
But a number of economists also argue the shift in the bank's tone may be in part due to concerns over the housing sector and potential impact on thousands of heavily borrowed households for which higher rates might be crippling.
Economists at the world's second-biggest currency trader, Deutsche Bank, on Friday brought forward its prediction for a first rise in BoE rates by six months, to November from May. Credit Suisse followed suit on Monday.
"This change in tone is more about when the bank starts its journey rather than its intended destination," Credit Suisse analysts said. "We expect a slow and limited tightening cycle. And one in which tighter macroprudential and monetary policy moves complement each other."
Sterling gained as much as a third of a percent against the dollar to a five-year high of $1.7011 as traders arrived at their desks in London on Monday, while the euro fell to its lowest against the pound since early October 2012.
But most of those new gains evaporated in morning trade in Europe and traders said that sterling might struggle to push higher still, at least against the dollar.
"Markets have now gone a long way in pricing in the scenario of the BoE being the first major central bank to raise rates," analysts at Dutch bank ABN Amro said. "Speculative net sterling long positions in the futures market are close to a five-year high. It is likely that these positions will dampen sterling's upside."
Others maintain that the prospect of another hawkish message from the BoE minutes will help the pound. Before Carney's comments last week, analysts had already been speculating that the minutes would show his colleague Martin Weale had voted in favour of a hike in rates now.
A number of analysts also speculate that Carney may have changed message so quickly in order to ensure he was not left behind by the consensus on the council.
"Strength could continue heading into Wednesday's minutes," Citi analysts said in a morning note. "Indications a more hawkish contingent are growing closer to, or in fact voted for, hikes in June are likely to spur on the recent rally."
Rabobank's Foley said the pound's strength would be more visible against the euro, undermined by the European Central Bank's moves to loosen policy just as the BoE headed in the opposite direction.
A U.S. Federal Reserve meeting this week also may hint at when it will start to raise rates after the projected end to its monthly quantitative easing programme in September or October.
"As long as the ECB maintains this dovish line sterling will remain strong against the euro and we could see it gain to as much (little) as 78 pence," Foley said. "Against the dollar it may be more complicated."
(Editing by Catherine Evans)