Aside from US data and the dollar's performance, London share prices will take their lead next week from a pre-budget report by British finance minister Gordon Brown and the latest interest rate call by the Bank of England. On Friday, London's FTSE 100 index of leading shares ended at 6,048.80 points, down 73.3 points or 1.2 percent from a week earlier.
The FTSE, like its main European rivals, was hit this week by discouraging US economic data which has rattled investor confidence and in particular seen the dollar tumble against the euro and the pound, dealers said.
A higher pound can dent profits for British companies who export to the United States and other countries paying for goods and services in dollars.
Losses on the FTSE were limited this week, however, by gains to heavyweight energy and mining stocks which benefited from rebounding commodity prices.
The week's biggest company news story surrounded Scottish Power, which on Tuesday accepted a take-over bid worth 11.6 billion pounds (17.15 billion euros, 22.55 billion dollars) from Spain's second-biggest power company Iberdrola - a move that was set to create Europe's third biggest utility group.
Next Wednesday meanwhile, Chancellor of the Exchequer Brown was expected to hike his forecast for British economic growth in 2006 when he delivers his pre-budget report, a curtain-raiser for next year's budget.
Analysts said Brown could use his speech to unveil also some new 'green' taxes aimed at tackling global warming.
Following the budget speech, the Bank of England was widely expected Thursday to keep British borrowing costs at 5.00 percent - a five-year peak - following a two-day rate-setting meet.
Policymakers last month voted by 7-2 to raise British interest rates by a quarter of a percentage point to help bring 12-month inflation down closer to its 2.0-percent target.
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