* Sterling falls sharply versus dollar on good US jobs data
* Sterling to stay weak on economic concerns, BoE QE bets
* Investors wary of sterling before UK budget on March 20
* UK industrial data next week expected to disappoint
By Anooja Debnath
LONDON, March 8 (Reuters) - Sterling hit a fresh 2-1/2-year low against the dollar on Friday after strong U.S. jobs numbers boosted faith that the U.S. economy is recovering, taking its currency with it.
The pound, meanwhile, is being hit by concerns that Britain may enter its third recession in four years and that the Bank of England is about to print more money as a stimulus.
Sterling is likely to suffer in coming days, traders said.
U.S. non-farm payrolls surged by 236,000 last month, beating economists' forecasts by almost half and pushing the jobless rate down to 7.7 percent - the lowest since December 2008.
"The move we saw (in sterling/dollar) post-payrolls is more a question of dollar strength on the back of the stronger number," said Christian Lawrence, currency analyst at Rabobank.
"This is somewhat at odds to the relationship we have seen over many years with positive data meaning a sell-off in the dollar," he said, adding the pair could test $1.45 over the next few weeks.
Sterling was down 0.5 percent on the day against the dollar at $1.4950, having fallen to $1.4886, its lowest since mid-2010. It was around $1.5030 before the U.S. data was released.
Its losses against the dollar dragged sterling's trade-weighted index to 78.3, close to a 20-month low of 78.1 struck on Feb. 25.
The pound has been one of the worst performing major currencies in 2013, falling around 8 percent against the dollar and around 6.5 percent against the euro.
The spreads between two-year U.S. government bonds yields and their British counterparts have moved in favour of the U.S., reflecting dollar demand.
"We have a big contrast in the direction in which monetary policy is heading," said Nawaz Ali, UK market analyst at Western Union. "For the UK it seems to be headed in one direction only and that is for an expansion in its asset purchase programme."
The euro was down 0.5 percent against sterling at 86.88 pence. Earlier, Middle eastern investors were the main buyers of the pound.
One-month implied volatility for sterling/dollar rose to 8.2 percent after the U.S. jobs data from around 7.9 percent on Thursday, signalling the pair is likely to see some sharp swings in the coming weeks.
The loss of one of Britain's prized triple-A credit ratings after a Moody's downgrade has also unnerved investors and called into question the government's strict austerity measures and kept markets wary of the pound ahead of the March 20 budget.
Prime Minister David Cameron vowed to stick to his deficit reduction plan on Thursday in the face of criticisms that spending cuts are hurting economic growth.
After poor construction output data on Thursday added to the economy's bleak outlook, industrial and manufacturing output data next week could disappoint and this will likely drag sterling even lower.
"We continue to look for sterling/dollar selling opportunities," said analysts at Morgan Stanley, adding sterling could fall towards $1.4660, and even further to $1.4300.