London stock market investors will fix their attention on the Bank of England's latest meeting to see whether the institution is ready to pump billions of extra pounds into the economy. The FTSE 100 index ended Friday at 4,236.28 points, down 0.11 percent from a week earlier amid worries about the strength of the US economy, traders said.
Although the Bank of England is on Thursday expected to keep its key lending rate at 0.50 percent for a fourth month running, the central bank may decide to increase the amount of money it is throwing at markets. The bank has so far offered 125 billion pounds (146 billion euros, 204 billion dollars) to financial institutions in a bid to get them lending again after the credit crunch, but can increase the amount if deemed necessary.
Britain's recession-battered economy shrank at its fastest pace, in more than 50 years during the first quarter of 2009 in the worst global slowdown in decades, revised official data showed on Tuesday.
Gross domestic product (GDP) contracted 2.4 percent in the first three months of the year compared to the final quarter of 2008, said the Office for National Statistics (ONS). Despite the worse-than-expected data, analysts predicted a brighter future for the economy as figures showed house prices recovering, helping to offset news that state-owned Lloyds Banking Group is slashing hundreds more jobs.
Meanwhile, more housing data is due amid increasing signs of a recovery for real estate prices. British house prices increased by 0.9 percent in June from May, home-loans provider Nation-wide said on Tuesday after economists had predicted a fall amid Britain's worst recession in decades. Nation-wide main rival, Halifax, presents its own latest monthly data on Monday.
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