(Adds comment, background, updates prices)
LONDON, Sept 15 (Reuters) - Britain's pound hit a 14-month high against the dollar on Friday and was heading for its best week in more than eight years on a trade-weighted basis, as traders stacked up bets on a near-term interest rate rise from the Bank of England.
Dominated lately by moves in the dollar and the euro, sterling drew renewed focus from investors this week: on Thursday it enjoyed its biggest surge against the dollar since April after the Bank of England said it was likely to raise record-low interest rates in the coming months.
Its tilt towards the first interest rate hike in more than a decade, and additional comments from Governor Mark Carney, saw sterling climb over 1 percent to hit $1.34 for the first time in over a year. It extended those gains to $1.3450 on Friday, up half a percent on the day.
The Bank of England's trade-weighted index, which measures sterling against a basket of currencies, was set for its best weekly showing since June 2009.
"Sterling's got limited legs now," ING currency strategist Viraj Patel said, arguing that the BoE's main objective in its communication change was to realign markets towards gradual interest rate rises instead of an imminent one.
"A November rate hike shouldn't be viewed as a sure-fire bet; we suspect that it is largely conditional on two factors: signs of a rebound in domestically generated inflation (namely wage growth) and a reduction in short-term political uncertainty," he wrote in a note to clients.
Analysts argue that the central bank's job has been complicated by wages that have not kept pace with inflation and an economy facing uncertainty caused by Britain's vote to leave the European Union, making it less likely to move soon.
Investors will be watching for further clues about the Bank's thinking when BoE policymaker Gertjan Vlieghe makes a speech at 0850 GMT.
"The MPC (Monetary Policy Committee) hinted at some more optimistic forecasts at their next inflation report, in particular, that spare capacity in the economy is being absorbed faster than they previously expected," Morgan Stanley strategists wrote in a note to clients, suggesting that market pricing for a rate hike could increase from its current levels.
Also on investors' radar is an expected speech on Brexit next week by Prime Minister Theresa May. The next round of Brexit negotiations with the European Union has been postponed by a week until Sept. 25.
Against the euro, sterling was 0.3 percent higher at 88.70 pence.
(Reporting by Ritvik Carvalho; Editing by Jemima Kelly and Mark Trevelyan)