Major company earnings, a Bank of England rate decision and unrest in Egypt will occupy the attention of London stock market investors next week, according to analysts. London's FTSE 100 index jumped 1.97 percent over the past week to finish at 5,997.38 points on Friday, as strong company earnings offset fears of rising inflation.
"The big unknown as we look to next week is the scale and spread of the crisis in Egypt and the resulting impact on commodity prices," said Philip Shaw, an economist at Investec financial group.
Global markets were on edge this week over the Egyptian political crisis, as protesters demanded the resignation of the nation's President Hosni Mubarak.
"With commodity prices already on an upward trend and being inflated by US storms and cyclones in Australia, the crisis provides a source of further worry for UK inflation," said Shaw.
Investors will also focus next week on the latest interest rate decision from the Bank of England. The BoE is widely expected to freeze its key lending rate at a record low 0.50% for a 23rd month in a row.
Some economists predict that the central bank will be forced in the coming months to raise borrowing costs in order to dampen soaring inflation - which has been propelled by resurgent prices of oil and other major commodities. British inflation stood at 3.7 percent in December, already way above the central bank's target of 2.0 percent. BoE governor Mervyn King has warned Britons to expect annual inflation to rise to between four and five percent in the coming months amid higher food and fuel prices.
Among the major British companies publishing their results next week are drinks giant Diageo, miner Rio Tinto and plane engine maker Rolls-Royce.
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