City predicts 7% Footsie rise

CITY brokers are predicting a 7% rise in the UK stock market during 2004, a survey by fund manager Legal & General will reveal next week. The consensus opinion of 10 brokers is for a rise in the FTSE 100, the index of Britain's leading shares, from 4,419 points today to 4,725 by the end of next year.

L&G's own prediction is for the Footsie to hit 4,600 by the year-end. However, history suggests investors should take the tips with a pinch of salt.

The City's soothsayers have a dismal track record on predicting the Footsie. In 2002, the consensus view was a 13% rise to 5840 points – the index actually tumbled 25% to 3,940.

The prediction in 2001 was for a 12% rise to 7,000 – it fell 16%. In 2000, analysts pencilled in a 6% rise to 7,350 – it fell 10%.

But the Footsie's recovery this year has spared more red faces. The consensus view was for a 13% rise from 3940 to 4500, a level the Footsie is fast approaching with just a few days trading left. Views from some of the more bullish brokers were more awry – Deutsche Bank said 5,000 and JP Morgan said 4,700.