London, April 30 (Bloomberg) -- The British pound, which has risen 1.2percent against the dollar this month, was little changed amidexpectations U.K. economic growth will outpace U.S. expansion in thecoming months. Sterling was at $1.4358, compared with $1.4349 late Friday. Against theeuro, it was little changed at 61.99, compared with 61.94. It's fallen 4percent against the dollar and risen 1.6 percent against the euro this year. While a U.S. growth report on Friday showed the largest economyexpanded faster than expected in the first quarter, analysts and investorsare still forecasting faster growth in the U.K. Figures on Friday showed theU.K. economy grew less than expected in the first quarter. ``We might get a slowdown in the U.K. but there is no way it will be anoutright collapse,'' said Kamal Sharma, a currency strategist atCommerzbank who sees U.K. economic growth at 2.5 percent this year.``Inflation is spiraling down. The Bank of England has room for a rate cut''to boost growth. He sees the pound rising as high as $1.4475 today. Higher growth rates in the U.K. may attract investors to British assets andthe pounds needed to buy them.
House Prices
U.K. house prices rose 0.8 percent in April after increasing 1.4 percent inMarch, according to Nationwide Building Society, the U.K.'s fourth-biggestmortgage lender. The annual rate of growth slowed to 6.6 percent from 7.2percent. The average price of a home rose to 86,244 pounds last month, accordingto Nationwide Building Society, the U.K.'s fourth- biggest mortgage lender. The statement from finance ministers and central bankers from the Groupof Seven leading industrial nations following their weekend meeting inWashington said U.S. growth has ``slowed sharply,'' while in the U.K. ``theslowdown appears to be only moderate.'' Still, U.S. growth accelerated to a 2 percent annual pace in the firstquarter from 1 percent in the previous three-month period, the governmentsaid. Economists expected growth of 1.1 percent.
Confidence
Britain's economic expansion slowed to 0.3 percent, less than the 0.4percent analysts had forecast, from 0.4 percent in the previous quarter.Growth cooled to 2.5 percent from a year earlier, down from 2.6 percent inthe fourth quarter. A report today showing U.K. consumer confidence dropped to its lowest insix months in April added to concern that Europe's No. 2 economy iscooling. ``The U.K.'s economic figures are beginning to turn downwards,'' saidStacey Seltzer, an economist at Brown Brothers Harriman & Co. ``You areseeing what looks like impact from the U.S. slowdown.'' He sees thepound falling as low as $1.41 in coming weeks. GfK Great Britain Ltd., which conducts the survey for the EuropeanCommission, said its measure of confidence fell to a reading of 1 lastmonth from 3 in March. Confidence has fallen from as much as 5 inJanuary. Brown Brothers' Seltzer said the U.K. currency's declines may beexacerbated by the weakness of the euro in coming weeks. ``Sterling is inextricable from the fate of the euro,'' he said. ``It's aEuropean currency and ends up being caught by the euro.'' Traders frequently buy and sell the euro and sterling together against thedollar. The 12-nation currency was at 88.96 U.S. cents from 88.89 Friday.It has dropped 5.6 percent against the dollar this year.