London stock market awaits British growth data

Investors on the London stock market next week will find out whether Britain is a step closer to a return to recession with the publication of key quarterly growth data. All eyes will be on the first official estimate of British gross domestic product (GDP) for the fourth quarter of 2011 published on Wednesday.
London's FTSE 100 index of top shares closed at 5,728.55 points on Friday, up 1.63 percent for the week thanks to improved sentiment surrounding the outlook for the eurozone debt crisis and US economic growth.
Although Britain is not a member of the eurozone, it relies on the bloc for the majority of its trade. Many analysts have forecast that next week's GDP data will show that Britain recorded negative growth in the final quarter of last year. However, robust December retail sales figures on Friday may indicate that Britain has in fact staved off a downturn between October and December 2011.
"It is certainly very possible that the economy contracted modestly in the fourth quarter and therefore has one foot through the recession door," said economist Howard Archer at the IHS Global Insight research group. "However, it is not inconceivable that the economy eked out marginal growth in the fourth quarter helped by decent consumer spending in December."
The technical definition of a recession is two successive quarters of contracting economic output. The economy clawed its way out of a deep downturn in the third quarter of 2009 but has since struggled to stage a convincing recovery, sparking concerns over a double-dip recession.
British retail sales rebounded in December by 0.6 percent after a fall of 0.5 percent in November, the Office for National Statistics said on Friday.
Retail sales were up 2.6 percent in December compared with the same month in 2010, helped by record sales of clothing and footwear and amid heavy discounting by stores and mild winter weather before Christmas. Ahead of next week's GDP data on Thursday, investors will get an update on the health of Britain's public finances when figures for December are published on Tuesday.
On Wednesday, the Bank of England publishes minutes from its last policy meeting earlier this month as traders look for clues as to whether it will announce plans for more stimulus measures as early as February. Among the companies updating markets over their performances next week are Cairn Energy and easyJet.