By John Beresford-Peirse and Chris Gothard

The British pound was little changed against the dollar after Chancellor of the Exchequer Gordon Brown reinforced the view the U.K. economy will grow faster than those of the U.S. and 12 countries that share the euro.
Brown, in his annual prebudget report yesterday, forecast growth next year of 2 percent to 2.5 percent. That compares with estimates from the Organization for Economic Cooperation and Development of 0.7 percent in the U.S. and 1.4 percent in the nations sharing the single currency.
The report ``reminded the market of the U.K.'s relatively strong fundamental position, helping boost sterling,'' said Lara Rhame, an economist at Brown Brothers Harriman in New York.
The pound was at $1.4171, compared with $1.4154 late yesterday, paring its fall this month to 2.6 percent. Against the euro, it was at 62.44 pence, compared with 62.31 yesterday. Sterling has risen 1 percent against the euro this year.
Brown said he's ``cautiously optimistic'' about Europe's second-biggest economy, saying it will probably expand 2.25 percent this year and 2.75 percent to 3.25 percent in 2003.
Bank of England Governor Sir Edward George said yesterday the chance of a recession in the U.K. next year is ``very small.'' A higher rate of economic growth may boost the appeal of U.K. assets and the currency needed to buy them.
``The U.K. economy is set to outperform all other Group of Seven industrialized nations next year,'' helping to boost the pound, said Steven Saywell, a currency strategist at Citigroup Inc. Citigroup recommends clients buy pounds against the Swiss franc.

MSCI Changes
The pound may gain against the euro in the next few days as changes to Morgan Stanley Capital International Inc.'s global stock indexes, which take place on Friday, increase demand for U.K. and U.S. equities, analysts said.
MSCI is changing the indexes, used as a performance benchmark by about $3 trillion in funds, to include companies based on their shares available for trading instead of their full market value. That will increase the overall weightings of U.K. and U.S. companies, while cutting those of European and Japanese stocks.
In the U.S., the National Bureau of Economic Research said earlier this week the largest economy entered a recession in March, ending a decade of expansion. The decline may be over by the middle of next year, economists suggest.
A report Friday will probably show the U.S. economy shrank 1 percent in the third quarter, based on a Bloomberg News poll of economists, compared with an initial government estimate of a 0.4 percent drop. Separate figures the same day are expected to show Chicago-area manufacturing declined this month.
U.S. consumer confidence fell to the lowest level in 7 1/2 years in November, a report yesterday showed. The Conference Board's consumer confidence index unexpectedly fell to 82.2 from a revised 85.3 the month before.
The report ``dampened market optimism for an early economic recovery in the U.S., which has weighed on the dollar,'' said Michael Klawitter, a market strategist at WestLB.