British investors, battered by US recession fears and record high oil prices, will seek higher ground but analysts predict more bad news in the form of a cut to government growth forecasts.
London's FTSE 100 index of leading shares ended the week at 5,699.90 points, down 3.13 percent or 184.4 points from the previous Friday. On Wednesday, British Chancellor of the Exchequer Alistair Darling will deliver his first annual budget since taking over as finance minister last June.
Chancellor Darling's maiden budget takes place against a backdrop of choppy financial markets, slowing economic growth and the state take-over of British bank Northern Rock.
Many analysts predict that the chancellor will be forced again to slash his economic growth forecasts for this year. "The Chancellor is likely to have to downgrade growth forecasts for this year and next, which will further strain the public finances," said Investec economist Philip Shaw.
Darling had admitted last month that Britain faced "uncertain times" but said the country's economy would weather current global market turmoil. Last October, Darling cut his forecast for 2008 growth to 2.0-2.5 percent from the previous 2.5-3.0 percent, citing the impact of the global credit crisis.
Britain recorded economic growth of 3.1 percent in full-year 2007, picking up from 2.9 percent in 2006.
Elsewhere next week, London investors will also digest annual results from British insurer Prudential. Other economic data will include producer prices and trade data for February.
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