Sept 1 (Reuters) - Sterling rose against a weakening

dollar on Monday but was on track for a 3-day falling streak

versus the euro, as investors awaited U.S. economic data later

this week amid renewed concerns over Britain's fiscal outlook.

Weakness in the pound has coincided with a decline in

British bank shares and an uptick in benchmark Gilt yields on

Friday.

"The UK is in a fiscal bind," said Stephen Jen, CEO of Eurizon

Capital, recalling that the 30-year gilts yield reached the

highest level since the late-1990s while fiscal spending remains

at a Maastricht-busting level of 4.4% of gross domestic product.

"In our view, its fiscal revenues are about to move to the

bad side of the Laffer Curve, higher tax rates will probably

start to lead to lower tax collection," he added.

The yield on the 30-year gilt hit 5.646%, its

highest level since 1998, and was last up 2.5 basis points at

5.63%

The pound was up 0.18% to $1.3528 and was down

0.14% to 86.65 pence per euro.

The greenback hit a 5-week low on Monday as investors looked

ahead to a raft of U.S. labour market data this week that could

affect expectations for the Federal Reserve's easing path.

Investors will closely watch the questioning of Bank of

England Monetary Policy Committee members by the Treasury

Committee later this week, looking for guidance on future rate

cuts or possible changes to the central bank's quantitative

tightening program.

Parliament returns from its summer recess this week, and an

announcement on the date of the Autumn Budget could follow.

"If the UK government wants the Bank of England to be able

to react, by cutting rates, to a fiscally tight budget, it will

have to announce the budget date this week," said Chris Turner,

head of forex strategy at ING, recalling that the Office for

Budget Responsibility requires 10 weeks' notice for the budget,

and the November BoE meeting is held on the 6th.