UK shares will look to interest rate decision from BoE

London's stock market will look to an interest rate decision from the Bank of England next week to help extend gains for British share prices, dealers said. On Friday, London's FTSE 100 index of leading shares ended at 5,949.10 points - up 1.20 percent or 70.5 points from a week earlier.
The Bank of England's decision over British borrowing costs, due next Thursday after a two-day meeting, will provide investors with its key focus at home.
Global interest rates have been foremost in investors' minds in recent months as many central banks opt to tighten monetary policy to combat signs of rising inflation amid strong economic growth.
"Neither the outlook for interest rates, nor the prospects for earnings growth, nor valuations for that matter are likely to bring about a collapse in the underlying trend of equity markets," Brewin Dolphin Securities analyst Mike Lenhoff said. "In our view that trend remains upwards."
The Bank of England (BoE) had voted last month to hike rates by a quarter-point to 4.75 percent in a surprise move aimed at controlling inflation and dampening economic growth. Analysts expect borrowing costs to remain on hold at next week's meeting, despite strong recent economic data.
Britain's economy grew at its fastest rate in two years during the second quarter, compared with the first three months of 2006. Meanwhile, 12-month inflation eased to 2.4 percent in July, but was widely expected to rise further above the BoE's 2.0-percent target in the coming months. On the corporate radar, a handful of companies publish earnings data next week.
Energy exploration group Cairn Energy and media agency Aegis Group weigh in with their first-half results on Tuesday. Online gambling group PartyGaming chips in on Thursday with its interim numbers.
Poor results would be unlikely to have any significant impact on the long-term upward trend for stock markets, Lenhoff added.
"For the long-term investor, the bottom line is that the strategic outlook is positive for equities and any setback in the markets resulting from earnings downgrades should prove to be a buying opportunity," he said.