* BoE's King sees "long, hard slog" back to solid growth
* King urges faster action to cut Britain's budget deficit
* King says not about to tighten monetary policy
* Sterling falls, analysts say BoE could expand QE purchases (Adds more quotes, analyst and market reaction)
By David Milliken and Fiona Shaikh
LONDON, June 24 (Reuters) - Economic recovery could still be a "long, hard slog" despite encouraging recent data, Bank of England Governor Mervyn King said on Wednesday, in a sign that the central bank is in no hurry to tighten policy.
His cautious remarks to a parliamentary committee were echoed by his Monetary Policy Committee colleagues who underlined the uncertainty facing policymakers, given a continued dearth of bank lending.
"I feel more uncertain now than ever. This is a pattern of recession that we've not seen since the 1930s," he said.
King said it may be a while yet before the economy was in a position to make good the past year's loss of output. "There has to be a risk that it will be a long, hard slog because of the difficulties in the banking sector."
Sterling fell after the gloomy outlook and analysts said the BoE may yet still raise the scale of its 125 billion pound ($207 billion) asset-buying programme funded by newly-created money.
"The MPC appears to be keeping an open mind on whether the Bank of England will need to further increase the amount that it is spending on quantitative easing," said Howard Archer, economist at IHS Global Insight.
King also said the government needed to take faster action to reduce the "truly extraordinary" budget deficit than is currently pencilled in, assuming that economic growth does recover as forecast.
"Although we are finding it easy now to finance those deficits by issuing gilts, there could be challenges down the road," he said. "What is needed is a credible statement of the path that will guide the reduction in deficits over the years."
However, any removal of fiscal stimulus should depend on the state of the economy, he added.
Similarly, he said that just because he was talking about how the BoE might eventually tighten policy, this did not signal they were about to. The central bank's outlook had not changed since forecasts in May which showed inflation well below target in two years' time, he said.
"If you withdraw stimulus too quickly, you run the risk that the downturn will resume. Equally of course, we need to be very careful not to allow the stimulus to reach the point at which inflation takes off," King said.
JURY'S OUT
Other MPC members also expressed scepticism that the latest data should be read as a sign that the economy was coming firmly out of recession.
"There's a considerable degree of uncertainty about the strength of the upturn, not just here but around the world," BoE Deputy Governor Charles Bean told the committee.
MPC member Kate Barker said she agreed with Bean's view. "To some extent the jury is still out," she said. "The financial system remains vulnerable."
Her colleague Andrew Sentance, one of the more hawkish members of the MPC, said he was encouraged by recent economic indicators.
"I'd see this as evidence that the economy is reaching some sort of bottom of the fall in output. I would expect that to be followed by recovery in output; I think the question is we can't say how strong that's going to be," he said. ($1 = 0.6036 pounds) (Reporting by Sumeet Desai, David Milliken, Fiona Shaikh and Matt Falloon; editing by David Stamp)