London, April 17 (Bloomberg) -- The British pound was little changed against the dollar,after earlier rising to a one-week high, amid mounting evidence the U.K. economy willoutperform the U.S.'s this year. Sterling was at $1.4375, from $1.4362 late yesterday, after earlier rising to as high as$1.4426. It has risen 1 percent in the past month, though it's 3.6 percent weaker thisyear. Against the euro, it was trading at 61.31 pence, compared with 61.69. ``The U.K. is much more stable than the U.S.,'' which should boost the pound incoming months, said Lothar Hessler, an economist at HSBC Trinkaus & BurkhardtKGAA in Dusseldorf. ``We expect zero growth from the U.S. this year.'' He sees U.K.growth of about 2.5 percent this year. Reports in the U.S. last week, including retail sales and consumer sentiment figures,indicated the economy may slow further. While U.K. growth forecasts have beenrevised down in recent days, the economy is still expected to expand more than 2percent this year, compared with the possibility of economic contraction in the U.S. Sterling may benefit from a more positive growth outlook in the U.K. as investors arelured to British financial assets and the currency needed to buy them. ``The U.K. will look rosy all the way through a U.S. slowdown,'' said Steven Saywell, acurrency strategist at Citibank, who sees the pound rising to $1.47 in the next month,based on better growth prospects in the U.K. compared to the U.S.
`Flexible Central Bank'
``The base line scenario is that the U.K. has a strong economy and a flexible centralbank,'' he said. ``The foreign exchange market is rewarding growth policies from centralbanks.'' As growth slows globally, lower interest rates are likely to bolster a currency byencouraging growth, analysts said. The minutes from the Bank of England's last rate meeting on April 5, when they cut thebenchmark borrowing rate by 25 basis points to its current 5.5 percent level, arereleased Wednesday and may give more insight on the outlook for interest rates. Traders will be watching U.S. reports today, including consumer prices and industrialproduction figures, to gauge the state of the economy. The U.S. consumer price index probably rose 0.1 percent in March after a 0.3 percentgain the previous month, according to a Bloomberg News survey. Industrial productionlikely fell by 0.2 percent in March, compared with 0.6 percent in February, a separatesurvey showed. The reports are scheduled for 1:30 p.m. and 2:15 p.m. London time.
Euro Declines
Any pound gains may be limited if the euro declines further against the dollar, Hesslersaid. The U.K. sells almost 60 percent of its exports to euro-zone countries, and tradersfrequently buy and sell the two currencies together against the dollar. The euro declinedto as low as 88.01 U.S. cents from 88.60. European stock declines also weigh on the U.K. currency, said Saywell at Citibank.``When we get European equity markets falling, that is making Europe-wide currenciesweaker, which includes the pound and the Swiss franc,'' he said. The Dow Jones Stoxx50, an index of Europe's 50 biggest companies dropped 1.7 percent today, bringing itsloss for the year to 11 percent.