With the latest earnings season nearing an end, London investors will pore over British economic data next week as the FTSE 100 index looks to rally after being hit by a fresh terror scare.
On Friday, London's index of leading shares ended at 5,820.10 points - down 1.18 percent or 69.3 points from a week earlier.
The FTSE tumbled on Thursday, after British authorities said they had foiled a plan to bomb passenger planes, hammering share prices across the airline and travel sector.
British Airway's share price had closed down 5.0 percent as the airline cancelled most short-haul flights from London's Heathrow airport following news of the thwarted plot to destroy US-bound planes.
BA stock eased 0.07 percent on Friday to finish at 370 pence.
In recent weeks, the FTSE has won support from strong company results.
"Although the earnings figures have been good, I don't believe it's a situation that can necessarily last because high energy prices, high raw material prices generally are causing a headache for companies," said equities analyst Jeremy Batstone.
"Going forward the confluence of slowing economic output growth, tighter monetary policy and higher input costs is likely to bear down on corporate earnings," added Batstone, who directs private client research at Charles Stanley stockbrokers.
The Bank of England (BoE) signalled Wednesday the prospect of more interest rate rises after warning that 12-month inflation could strike 3.0 percent by the beginning of 2007.
On Tuesday, the British government is to unveil inflation data for July.
The following day, the BoE publishes minutes from its latest monthly policy meeting when a decision was taken to hike British interest rates by a quarter-point to 4.75 percent - the first increase in two years.
In addition to the inflation data, the release of unemployment and retail sales figures are due next week, which should provide clues for the British-rate outlook.
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