SEOUL, Jan 28 (Reuters) - South Korea's key consumer sentiment index rose to its highest in eight months in January from the month before, holding above the neutral point for the first time since mid-2012 and raising hopes for a pick-up in consumption.

The consumer sentiment index from a monthly Bank of Korea survey stood at 103 in January, up from a reading of 99 in December, the central bank said in a statement on Monday.

January's reading was the highest since May last year and it stood above the neutral point of 100 for the first time in five months.

A reading above 100 indicates consumers who are expecting economic and living conditions to improve in the coming month outnumber those who see them deteriorating.

In the same statement, the central bank said the median expected inflation rate for the next 12 months edged up to 3.2 percent in January from a revised 3.1 percent in December.

The expected inflation rate was still lower than the upper 2-percent range rates seen in early 2012, giving the central bank room to cut interest rates to support the economy if needed.

The country's quarterly economic growth picked up slightly in the fourth quarter to 0.4 percent during the September-December period from a meagre 0.1 percent growth in the previous quarter, but policymakers and analysts do not expect a jump in growth anytime soon.

January's surveyed expected inflation rate lies near the centre of the Bank of Korea's recently set inflation target band for the next three years at between 2.5 percent and 3.5 percent.

The index and survey were put through a regular revision in January to increase accuracy of the survey results, the Bank of Korea said, adding that all results from July 2008 to December last year were revised.

The Bank of Korea said it surveyed more than 2,000 households between Jan. 11 through 18.

(Reporting by Christine Kim; Editing by Jacqueline Wong) Keywords: KOREA ECONOMY/SENTIMENT

(christine.kim@thomsonreuters.com)(822 3704 5665)(Reuters Messaging: christine.kim.thomsonreuters.com@reuters.net)

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