UPDATE 1-Nov KOF signals continued recovery in Swiss economy

* Economic barometer up less than expected

* No effect seen on SNB rate policy

* Dubai worries seen as main driver for Swiss franc

(Adds analysts' comment, background, franc update)

By Jason Rhodes

ZURICH, Nov 27 (Reuters) - Switzerland's economic recovery is set to continue but possibly at a slower pace than economists had expected, the country's leading economic growth survey for November indicated on Friday.

The KOF Swiss Economic Institute barometer rose to 1.62 points against a consensus forecast for a stronger rise to 1.80 in a Reuters poll. The indicator has posted record rises over recent months, rebounding quickly from an all-time low in April.

The improvement adds to signs the Swiss economy has moved out of the deep recession it entered in mid-2008 as the financial crisis hit exporters and banks.

"The KOF is now consistent with growth at the beginning of next year of 2-3 percent. The message is still that the Swiss economy has enjoyed quite a strong rebound from recession in the last few months," said BNP Paribas economist Eoin O'Callaghan.

Economists said the barometer was unlikely to change the Swiss National Bank's policy of maintaining ultra-low interest rates, designed to nudge the economy out of deflation and crank up flagging growth.

"The recession was so deep and the output gap so large that the (KOF and other indicators) won't prompt the SNB to change rates," said Sarasin economist Alessandro Bee.

It was unlikely that the KOF could keep up the momentum recorded in August and September as the Swiss economic rebound was linked to a recovery of the global economy which looked like a "short-term phenomenon", said O'Callaghan.

FRANC MOVES

The Swiss franc dropped against the dollar on Friday, falling further away from the previous day's 19-month high at which some traders had said the Swiss National Bank intervened to stem the Swiss unit's rise.

The franc hovered at 1.0107 francs per dollar at 1205 GMT. It rose to as much as 0.9914 against the dollar on Thursday.

The dollar has since jumped against most currencies as investors cut carry trades and risk exposure on concern about Dubai's debt problems. [ID:nGEE5AQ0XD]

Any decision by the SNB to raise rates was likely to be preceded by a change in its policy on Swiss franc intervention, said Schubert at Credit Suisse.

"We would expect them to stop intervening or intervene below 1.50 (euro/Swiss) before they choose to hike rates," he said.

The SNB appeared to be continuing to intervene to stop appreciation of the Swiss currency around the level of 1.50 euros to the franc, Schubert said, citing Thursday's spike in rates. The franc traded at 1.5060 against the euro at 1207 GMT.

He did not expect Friday's leading indicator to have a noticeable impact on trading in the franc, as Dubai's problems continued to unnerve investors.

"We would expect a near-term boost for the franc from the Dubai fallout and economic conditions point to a strong Swissie," said Credit Suisse economist Sven Schubert.

(editing by Patrick Graham)

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