Sterling steadied below recent six-week highs against the dollar on Friday following largely upbeat UK lending data. Provisional data from the Bank of England for January showed M4 money supply rising 1.1 percent rise versus 0.7 percent in December and M4 lending up 1.0 percent, compared with a 1.0 percent rise in December. However, data from the British Bankers' Association showed underlying mortgage lending was up 4.4 billion pounds last month, a marked slowdown from a 5.1 billion pounds rise in December.

"The M4 data certainly suggests that there's still life in the UK consumer side. Despite the softness in the housing sector, overall lending and credit remain strong," said Audrey Childe-Freeman, European economist at CIBC World Markets.

Sterling was steady against the euro at 68.93 pence at 1512 GMT.

The pound was trading at $1.8937, little changed from the US close and off earlier highs of $1.8972, within a few ticks of six-week highs set on Tuesday.

Sterling steadied against the dollar after stronger than expected US core producer price data for January was balanced by a lower than expected reading in the University of Michigan's preliminary survey of consumer confidence for February.

Investors are keen for news about the financial health of the British consumer and the state of the UK housing market as they speculate whether there are more UK rate rises to come, following five hikes between November 2003 and August 2004, to 4.75 percent.

Copyright Reuters, 2005