Last week in London
The London market extended the previous week's gains early on amid takeover speculation surrounding bookseller WH Smith, which drove the share price almost 40% higher.
The tone of the market benefited from optimism in the US, where earnings upgrades outweighed fears of higher interest rates.
Meanwhile domestic data releases gave a mixed picture of inflation, as consumer, producer and house price inflation numbers were all published during the week.
Consumer price inflation fell in March to its lowest level in nine months, approaching the point at which the Bank of England will have to explain the weakness in price growth to the government.
Prices rose 0.2% in March after a 0.3% gain in February, giving a rise of 1.1% from a year ago, down from 1.3% in February and the lowest since June.
The Bank of England is attempting to keep inflation in the middle of a target band of 1-3% and the March slowdown to nearer the bottom of the range brings closer the level at which BoE Governor Mervyn King would have to write a letter of explanation to Chancellor of the Exchequer Gordon Brown.
Producer prices rose in March at the fastest pace in a year, reflecting higher prices for alcohol, tobacco and scrap metal.
Prices rose 0.4% on the month following a 0.2% rise in February, ahead of expectations of a 0.3% gain.
From a year ago, producer prices rose 1.3% in March and 1.6% the month before, while the core measure of factory-price inflation (excluding food, drink, petroleum and tobacco costs) rose a seasonally adjusted 1.4% from a year ago in March, the same as in January and February.
The cost of tobacco and alcohol products rose 0.9% in March from February, mostly reflecting higher excise duties imposed by in the March budget.
GDP growth slowed for the first time in a year during the first quarter as industrial production declined, thought by some to lessen the chances of another interest rate rise as early as May.
GDP rose 0.6% in the first three months of the year, below expectations of a 0.7% rise, following a 0.9% gain in the fourth quarter.
The growth level is now back below the level which the Bank of England believes is compatible with stable inflation.
The slowdown came as factory production fell unexpectedly in February, having failed to grow the previous month.
The minutes of the April meeting of the Monetary Policy Committee showed that all but one of the nine committee members voted to keep the benchmark lending rate at 4%, citing the stronger pound and weaker manufacturing output.
The budget deficit widened to a record level in March on higher government spending as Chancellor of the Exchequer Gordon Brown increased payment to honour government pledges to improve roads, schools and hospitals by 2006.
The public sector net cash requirement rose to £14.9bn March, the highest since the measure began in 1984 and from £11bn a year ago.
For the full fiscal year, the government's preferred deficit measure, the public sector net borrowing requirement, totalled £34.8bn, below the March budget forecast of £37.5bn.
Prudential (+3.3% to 467p), the UK's second largest insurer by premiums, reported a 5.9% rise in new business in the first quarter as higher sales in the UK and US more than offset a decline in Asia.
Having cut its full year dividend last year for the first time since World War I to fund growth and pay claims, the company is now cautiously optimistic about its prospects this year.
Egg (+1.9% to 157p), the UK's largest internet bank, in which Prudential is the majority shareholder, reported a narrowing first quarter loss after it slashed advertising spending at its unprofitable French unit.
The loss fell to £5.7m from £18.3m a year earlier. One of Europe's first internet banks, Egg has struggled to make money after expanding into France in 2002, when it bought ZeBank for EUR36m. This is Egg's eighth consecutive quarterly loss.
Mortgage bank Abbey National (-4.0% to 421¼p) returned to profit in the first quarter after two years of losses, as it sold unprofitable investments such as loans to Enron and WorldCom.
