Shares in London, however, still managed to set another record, closing up just over 9 points at 3,977.2 in very light trading. But this week's economic statistics are expected to be less encouraging than the recent run of indicators pointing to rapid growth with low inflation.
Analysts expect today's figure for the public sector borrowing requirement in August to amount to more than pounds 4bn following a surprise repayment of pounds 1.7bn in July. And recent surveys suggest that official figures for retail sales last month will rebound.
The gap between government revenues and spending has been scarcely any lower this financial year than last year. The reason for the disappointing performance has been expenditure growth running at more than twice the rate needed to hit this year's target. Many City experts reckon this year's PSBR will exceed the Treasury's pounds 27bn forecast.
Yet the indications are that Kenneth Clarke, Chancellor of the Exchequer, is looking to cut more than pounds 3bn from existing spending plans to announce tax cuts in November's Budget. A freeze on the public sector pay bill for the fourth year running is also likely.
Leo Doyle, an economist at investment bank Kleinwort Benson said: "Existing plans are already really tough. When they take off another few billions in the Budget, it will be very difficult to deliver." He predicted that the PSBR would stick at pounds 29bn this year and next - the same as in 1995- 96.
Other City experts are more optimistic. Ciarn Barr at Deutsche Morgan Grenfell said: "Spending has slipped but I think they will manage to restrain it."
He also predicted that rapid growth in tax revenues, due to consumer spending picking up, would come as a pleasant surprise.
The financial markets are likely to remain on edge until after next Tuesday's meeting of the Federal Open Market Committee.
The risk of an increase in US interest rates can not be completely ruled out despite last week's unexpectedly low inflation figures.
Industrial production and capacity figures due today are known to be closely watched by the Fed. Analysts expect the year-on-year growth in output to fall to just over 3 per cent and would be alarmed by higher growth.
The Dow Jones industrials index was more than 36 points higher at 5,874.77 by late morning.Reuse content