The British stock market will seek higher ground amid a raft of important economic data releases, after tumbling by almost three percent over the past five days. The FTSE 100 index ended the week on Friday at 5,261.60 points, down 2.79 percent or 151.2 points from the close one-week earlier.
That level also marked the lowest finish since October 28, 2005 and was the eighth weekly drop in a row. London plunged on Friday, mirroring heavy falls to other global stock markets, as investors worried over record high oil prices and the US financial services sector, dealers said.
Investors will pay close attention to British inflation and unemployment data as the FTSE 100 looks to shrug off the impact of sky-high energy costs. The price of London Brent North Sea crude oil hit a record high above 147 dollars per barrel on Friday, amid simmering tensions over key producer Iran and the weak US currency, traders said.
London's Brent North Sea oil for August delivery jumped as high as 147.50 dollars, which beat the previous record of 146.69 dollars set on July 3. New York's main oil contract, light sweet crude for August delivery, hit another record peak of 147.27 dollars.
Runaway oil prices are pushing up inflation, which in turn is causing economic growth to slow. "We are trying to avoid sounding too gloomy over the UK economy but next week's run of indicators makes this aim something of a challenge," said Investec Securities economist Philip Shaw.
"Monday's producer prices inflation figures are likely to reach new record highs while we are forecasting the following day's consumer prices index inflation numbers to rise even further above the (government's) 2.0 percent (annual) target to 3.6 percent," Shaw said. "We are also expecting a 15,000 rise in unemployment for June (in data published) Wednesday and another poor set of public sector finance figures also for June on Friday," he added.
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