Britain's stock market, looking to extend gains for a sixth week running, could come under pressure from the government's pre-budget report next Monday and Bank of England interest rate decision on Thursday.
The FTSE 100 index of leading shares closed at 5,528.1 points on Friday, a rise of 0.08 percent, or 4.3 points, from the previous week.
The index struggled to make gains this week as heavyweight energy stocks faltered owing to weaker oil prices and talk that energy companies could be hit in finance minister Gordon Brown's pre-budget report.
"The prospect that Gordon Brown could levy a 'windfall tax', in the form of a 5.0-percent rise in the offshore rate of corporation tax, has weighed on the FTSEs heavyweight oils sector," said Nomura analyst Anais Faraj.
The pre-budget report before parliament is a curtain-raiser to the Labour government's full budget due in March 2006.
Aside from the budget, this week sees the Bank of England hold its latest monthly meeting over interest rates. The central bank's nine policymakers were widely expected to keep the cost of British borrowing at 4.50 percent, where it has stood since August.
While the bank cut rates from 4.75 percent in August, citing weak economic growth in Britain, the European Central Bank decided on Thursday to hike eurozone borrowing costs for the first time in five years.
The quarter-point increase to 2.25 percent, owing to inflation concerns, was not however expected to be followed by further monetary tightening, according to ECB president Jean-Claude Trichet.
Meanwhile in Britain, "markets expect UK rates to remain on hold for some time", Faraj said. "The worst of the property slowdown may be over but retail trading conditions remain very difficult."
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