British growth data in spotlight for traders

British growth data will provide a key focus of attention next week for traders on the London stock market, alongside developments over the Portuguese debt crisis, Arab unrest and Japan's woes. Dealers are also eagerly awaiting publication of key jobs data in the United States on April 1.
London's FTSE 100 index rose 3.19 percent over the past week to finish at 5,900.76 points on Friday, helped by confidence that the European Union would come to the rescue of embattled Portugal.
Britain on Tuesday publishes its final estimate of gross domestic product (GDP) for the fourth quarter of 2010, with the coalition government hoping for a change of fortunes after slashing its 2011 growth estimates this week.
The Conservative-Liberal Democrat administration cut its 2011 growth forecast to 1.7 percent from a previous estimate of 2.1 percent.
Finance minister George Osborne, who gave the downgrade in his annual budget to parliament Wednesday, blamed the sharp revision on the British economy's contraction in late 2010 and on rising commodity prices and inflation. According to the previous official GDP estimate, the British economy shrank 0.6 percent in the final three months of 2010, partly because of freezing weather that hit the construction and retail sectors.
"Hot on the heels of the UK budget will be the second revision to UK fourth-quarter GDP," said Philip Shaw, an economist at Investec financial services group.
"Our forecast is for no change to the latest estimate, which showed GDP contracting by 0.6 percent on the quarter - emphasising the challenge (Osborne) faces in bringing the public finances under control in a tough fiscal environment," he added.
Osborne warned in his budget that weaker-than-expected economic activity would dent the battered public finances in the coming years. However, he revised predicted public sector net borrowing for the current 2010-11 fiscal year, which runs to the end of March, to £146 billion (166 billion euros, $235 billion) from £148.5 billion previously.
The country's debt has ballooned in the last few years owing to massive bailouts of major banks and a significant reduction in tax revenues caused by Britain's deepest recession in decades that ended in late 2009.