Weekly Review

The FTSE 100 finished up 49.13 points on the week at 6,550.27.

Equity view

Oil and gas group Afren said it is looking at its "strategic options" for its 60% interest in the Barda Rash field, after analysis of the Kurdistan project showed a "material reduction" in reserve estimates.

Housebuilder Taylor Wimpey said trading stabilised somewhat in the second half of 2014 as house-price growth eased, but painted an upbeat picture of the UK housing market as it lifted its margin guidance slightly.

Biopharmaceutical group Shire has announced it will acquire NPS Pharmaceuticals for $5.2bn in cash, a long-rumoured target.

Despite a record Christmas, high street department store Debenhams has scaled back its forecast for margin improvement due to strong sales of lower-margin products over the festive period and a poor clothing performance.

Morrison's has given chief executive Dalton Philips the axe after he oversaw the worst Christmas performance of the Big Four supermarket groups, although sales were not as bad as the City expected.

Burberry said it delivered a "strong" performance in its third quarter with reported growth rates accelerating, but highlighted a slowdown in the high-margin market of Hong Kong.

Video game and console retailer Game Digital, in an early Christmas trading update released after hours on Tuesday, warned that profits would be lower than it previously guided due to intense competition eroding hardware margins.

Standard & Poor's has followed in the footsteps of fellow ratings agency Moody's as it downgraded its rating on Tesco's debt to the equivalent of 'junk'.

Tullow Oil said write-offs and impairment charges for 2014 would total billions of dollars after profits more than halved last year due to the collapse in crude prices.

Oil giant BP faces a maximum penalty $13.7bn under the Clean Water Act, some $4bn less than feared, after a judge ruled that 3.2m barrels of oil were discharged in the Gulf of Mexico in 2010, well below expectations.

Economic news

UK inflation dropped well below 1% growth for the first time since June 2002, dragged by falling oil prices. The consumer price index rose 0.5% year-on-year, compared to expectations of 0.7% and the previous month's 1%, the Office for National Statistics revealed.

UK retail sales declined in December, with the sector seeing its worst growth for six years, though supermarkets had a better time with total food sales growing for the first time since April. Like-for-like sales fell 0.4% in December against the same month in 2013, much worse than the 0.9% surge enjoyed in November.

Tighter lending rules and a looming national election saw British house prices grow at the slowest rate since May 2013. The Royal Institution of Chartered Surveyors (RICS) said its monthly house price balance dropped to +11 in December, from +13 a month before.

UK supermarkets saw their sales volumes rise for the first time in more than a year with Morrisons having the best performance over Christmas, Nielsen said on Friday. Overall sales during the four weeks to January grew 0.6% against same time last year.

International events

A leading lawyer at the European Court of Justice has suggested that the European Central Bank will be able to open the floodgates on full-blown bond-buying programme. ECJ advocate general Cruz Villalon said the Outright Monetary Transactions (OMTs) were compatible with EU law, as long as certain conditions are met, which some economists said effectively gave the green light to full blown quantitative easing by the ECB.

A decline in revenue from trading and lending saw Bank of America's fourth quarter profit sank 11% year-on-year, despite strong expense controls.

The World Bank expects global growth of 3% this year and 3.3% next year, below its June forecast of 3.4% and 3.5% respectively.

The Swiss National Bank (SNB) has abandoned its minimum exchange rate of 1.20 franc per euro, surprising the market with the timing as it brought a three-year policy to an end and sending the franc soaring and the single currency crashing against the dollar.

US retail sales declined 0.9% year-on-year in December, more than the 0.1% drop expected by analysts. Commerce Department figures showed the biggest fall since January 2014 and followed a 0.4% increase in November.