December 07, 2006	Thursday	Ziqa'ad 15, 1427

LONDON, Dec 6: European stock markets steadied on Wednesday ahead of a pre-budget report by British finance minister Gordon Brown and on the eve of interest-rate decisions by the ECB and Bank of England.

London's FTSE 100 index of leading shares climbed 0.12 per cent to 6,093.80 points in morning deals, in Frankfurt the DAX 30 dipped 0.07 per cent to reach 6,368.05 points and the Paris CAC 40 fell 0.13 per cent to 5,352.92.

The DJ Euro Stoxx 50 index of eurozone blue chip shares decreased 0.12 per cent to 4,003.20 points. The euro stood at 1.3290 dollars.

London investors were gearing up for Brown's tenth and probably final pre-budget report later Wednesday, in which he was expected to raise his economic growth forecast for 2006 while maintaining his estimates for 2007.

Chancellor of the Exchequer Brown, hot favourite to succeed Tony Blair as prime minister when Blair steps down next year, was meanwhile expected to put increased investment in Britain's schools and higher taxes on polluters at the centre of his curtain-raiser for next year's budget.

European traders were keeping a close watch also on the interest-rate situation. The European Central Bank was Thursday expected to raise its benchmark “refi” refinancing rate by a quarter of a per centage point to 3.50 per cent, bringing eurozone interest rates to their highest level in five years.

The same day Bank of England policymakers are set to freeze British interest rates after hiking borrowing costs to a five-year high of 5.0 per cent in November.

Heading London's FTSE 100 meanwhile early on Wednesday was Royal Bank of Scotland, which climbed 2.88 per cent to 1,893 pence after Britain's second biggest bank said it was on track to beat the market's profit expectations for the full year.

In its final trading statement of 2006, it said pre-tax profit was set to come in “slightly ahead” of the current consensus analyst forecast of 9.158 billion pounds (13.559 billion euros, 17.989 billion dollars).—AFP