Markets will spend this week digesting the goings on over the weekend at the IMF/World Bank annual meeting in Washington and keeping an eye on economic data coming out of the US. The IMF sees little chance of the world economy picking up in what remains of this year and last week adjusted downwards its forecasts for most economies. Worse still, it expects things to get worse before they get better.

On top of all that, there is little confidence in achieving stability in the markets while uncertainty persists over the US threat to start a war with Iraq. There will also be jitters ahead of the third quarter reporting season, despite the boost of good news last week from GE.

In Europe, it is a quiet week, although the Small Firms Association will undoubtedly use its annual conference to hammer home the need for a more business friendly climate ahead of negotiations on a new national agreement.