Investors trading on the London Stock Exchange will focus on British inflation data and minutes from the Bank of England's latest meeting on interest rates for clues on future monetary policy. The FTSE 100 index ended the week on Friday at 5,802.80 points, down 1.76 percent or 104 points from the close of one week earlier.
Britain's leading shares index suffered this week, in line with other major global indices, on widespread concern that sky-high oil prices would stoke inflation and lead to higher interest rates.
The value of British property builders slid as the housing market reeled from the global credit crunch, high interest rates and inflation. Investors were worried that rising energy costs would prompt central banks to raise the cost of borrowing, which would hurt consumers and reduce company activity.
Next Tuesday sees the publication of British inflation data for May.
Official data this week revealed that the cost of goods leaving British factories had surged to record highs in May for the second month running as the cost of raw materials, notably oil, continued to soar. Analysts said the shock data pointed to higher inflation in Britain, which would prevent the Bank of England from cutting interest rates.
British inflation had jumped to an annual rate of 3.0 percent in April, driven by soaring commodity prices. The reading was above the Bank of England's 2.0-percent target for the seventh month in a row and was well above market forecasts for 2.6 percent.
Meanwhile the Bank of England had on June 5 kept its key lending rate at 5.0 percent, a move analysts said was designed to dampen high inflation despite slowing economic growth and a slumping property market. On Wednesday, the BoE publishes minutes from its rate meeting held last week.
Comments
Comments are closed.