* Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh * Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv (Updates headline, rates; adds chart, news) LONDON, March 12 (Reuters) - Sterling fell against a stronger dollar on Friday as Treasury yields climbed, but the pound was still on track for weekly gains amid hopes for an economic recovery following Britain’s speedy vaccination programme. Sterling was down 0.5% against a stronger dollar at $1.3929 as U.S. Treasuries sold off during early London trading, pushing the yield on the benchmark note above 1.60%. “The weaker pound is largely a function of higher yields pushing the U.S. dollar into positive territory,” said Neil Jones, head of FX sales at Mizuho Bank. “The market is looking to hedge inflation fears again by buying U.S. dollars.” In sharp contrast to recent market expectations, Bank of England data showed on Friday the British public’s expectations for inflation over the next 12 months held at its lowest level in more than four years. Sterling has gained more than 4% against the euro in 2021 and around 2% versus the dollar. It was still on track for weekly gains versus both, amid hopes that Britain’s relatively successful COVID-19 vaccine programme will support its economic recovery. Data showed on Friday that Britain’s economy shrank 2.9% in January from December, a less severe decline than expected, as the country went back into a coronavirus lockdown. The better-than-feared data proved “slightly GBP positive”, said ING analysts, adding they expected sterling to continue to trade around 85.50 pence versus the euro. Also buoying the pound were dwindling expectations that the BoE would push interest rates below zero, and a Brexit trade deal signed in December with the European Union. But data showed on Friday that Britain’s exports to and imports from the EU plunged during the first month of the country’s new trade relationship with the bloc. Versus a weakening euro, sterling rose 0.1% on Friday at 85.58 pence.