The FT-SE 100 index on Friday fell 2 per cent to 4764.3, down 1.8 per cent on the week, with BP, SmithKline Beecham and HSBC Holdings leading the decline.
"More and more people are talking nervously about Asia's impact," said Paul Maguire of Lincoln Investment Management. "We're not rushing to put our money in the UK."
Wednesday will be the key day, with the October unemployment and September average earnings reports followed by the Bank of England's quarterly inflation report and then the Federal Open Market Committee meeting in the US.
"It could be a case of waiting for Wednesday for gilts," said Kevin Adams, bond analyst at BZW. "An uptick in average earnings would certainly heighten concern about a possible December rate increase."
Economists expect that average underlying earnings rose at an annual rate of 4.5 per cent in September, unchanged from August. The Bank of England has often voiced its concern about tightening in the labour market, one of the reasons cited for Thursday's rise in interest rates.
Mr Adams expects the inflation report to "list the Bank's various worries, but since it has raised rates already it shouldn't have too much impact".
Other economic reports include producer price inflation in October on Monday, and retail price inflation numbers for October and the British Retail Consortium October sales survey on Tuesday.
Most analysts expect US rates to be unchanged next week, but it is not a foregone conclusion, and bond markets could be nervous ahead of the meeting.
Even though last week's UK rate rise was unexpected, the interest rate futures market shows traders expecting a further rise before the end of the year. The yield on the December short sterling futures contract at 7.61 per cent is still high enough above current base rates to suggest expectations of a further quarter-point rate rise by mid-December.
Insurers could be a focus this week as General Accident, Commercial Union and Sedgwick report third quarter earnings. General Accident is expected to post 12 per cent growth in profit to pounds 131m, even as the insurance market becomes more competitive. CU is expected to post profits of pounds 123m, down 7 per cent.
Copyright: IOS & Bloomberg