By Chris Gothard, James Amott and John Beresford-Peirse
London, Nov. 19 (Bloomberg) -- The British pound fell to a three-week low against the dollar on concern slowing U.K. growth will dissuade investors from purchasing British assets and the pounds needed to buy them.
A report today showed U.K. consumer confidence dropped to its lowest level since December 1998. This followed reports last week showing an unexpected drop in British retail sales and rising unemployment.
``The pound will weaken as leading indicators show that the U.K. economy is still in a downturn,'' said Jan Amrit Poser, head of foreign-exchange research at Bank Sarasin & Cie in Zurich.
Sterling slipped as low as $1.4213, from $1.4273 Friday. That's the weakest since the pound reached $1.4197 on Oct. 23. It traded at 61.87 pence per euro, from 61.90.
The Centre for Economics and Business Research said its index of consumer confidence fell 2.3 percent in November from October. The report adds to evidence that household spending, which powers 60 percent of the U.K. economy, is slowing.
``There is an element of concern about the U.K. economy'' weighing on the pound, said Mark Austin, a currency strategist at HSBC Bank.
Reports this week on the U.K.'s trade balance, lending, money supply and industrial trends may give investors more clues about the extent of the slowdown.

Still Growing
Still, some analysts said growth in Europe's second-largest economy will probably outpace that of the U.S. and the 12 countries that share the euro in coming months, making the U.K. a more attractive place to invest. The BOE said last week the nation's economy will probably avoid recession next year, with growth accelerating in 2003.
``The U.K. economy looks the strongest of the'' Group of Seven industrialized nations, said Austin at HSBC.
The U.S. and Germany are headed for recession, according to many analysts and investors. A report Friday showed U.S. industrial production fell in October more than any other month in almost 11 years. Economists surveyed by Bloomberg News said Europe's largest economy probably stalled in the third quarter, following no growth in the second.
Sterling may also be affected in coming days by the progress of the U.S.-backed military campaign in Afghanistan, analysts said. It fell 2 percent against the dollar last week as the flight of Taliban forces from the U.S.-backed opposition forces raised hopes the conflict is nearing an end.