* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv (Rewrites with Barnier comments)
LONDON, Feb 9 (Reuters) - Sterling slid against the dollar and the euro on Friday after the European Union's Brexit negotiator, Michel Barnier, warned Britain that a post-Brexit transition deal is "not a given."
The pound had been in positive territory before Barnier spoke, with the Bank of England's comments on Thursday that interest rates would probably need to rise sooner, and by more than it had previously thought, supporting sterling.
But the British currency quickly reversed those gains and fell 0.8 percent against the dollar to trade at $1.3798 and 0.8 percent versus the euro to trade at 88.75 pence .
Against the dollar, sterling is now at its lowest since mid-January.
"It 1/8Barnier's comments 3/8 have raised the risk that a transition deal may not be as easy to achieve as the market had expected," Lee Hardman, a strategist at MUFG in London said.
Sterling has rallied this year as investors bet Britain can secure itself a transition deal with the EU and then leave the bloc next year on favorable terms.
The Bank of England gave a rosier view of the British economy on Thursday but its hawkish comments on interest rates hinged on smooth negotiations with the EU in the coming months.
"Over half of the gains that the pound made since the start of the year against the dollar have been wiped out," said Hamish Muress, currency analyst at OFX.
"The losses against the euro are even more pronounced. With Brexit once again moving back onto the markets' radar, risk of a sterling downturn has returned and even the Bank of England's aggressive policy outlook hasnt provided much support to the pound."
BoE Deputy Governor Ben Broadbent said on Friday he did not think a couple of interest rate hikes in the space of a year should come as a great shock, though he also added that the central bank had not fixed any path for tightening policy.
That came a day after the central bank said it was likely to tighten policy sooner and by more than policymakers had reckoned only three months ago, because Britain's slow-moving economy was getting a boost from the global recovery.
Data released on Friday showing British industrial output sank by more than expected in December had little impact on the pound.
After Thursday's policy meeting, financial markets now price in a nearly 70 percent chance of a BoE rate hike in May.
A Reuters poll of strategists found on Thursday that this year's sterling surge is over, and concerns over Brexit will start weighing the currency down again. (Editing by Mark Heinrich)