London investors will train their sights on the Bank of England, where current interest rates are expected to be maintained, as the second half of the year got underway on a negative note. The London FTSE 100 index in the first week of the new semester gave up 2.12 percent from a week ago to finish at 5,412.80.
Market sentiment was dented last week by sharp falls at Taylor Wimpey, which failed to secure a re-financing package, and retail giant Marks and Spencer, which issued a profit warning.
With Wall Street not reopening until Monday after a long weekend, investors in London on Friday were already looking ahead to next week's key decision on British interest rates.
The Bank of England makes its latest monthly rate call on Thursday, with analysts expecting the BoE to keep borrowing costs at 5.0 percent as it seeks to battle soaring inflation - which came to an annual 3.3 percent in May - and sliding economic growth. With few companies set to report financial results, attention will also turn to several economic indicators, such as industrial production for May on Monday.
Analysts at Calyon bank forecast a decline of 0.1 percent from April and 0.8 percent from May 2007. British trade figures will be published on Wednesday. Among the few companies reporting next week are the London Stock Exchange, broadcaster BSkyB, the Man financial group and the research firm TNS.
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