Market report: Thursday close

THE City took Chancellor Gordon Brown's Pre-Budget Report in its stride this afternoon. The FTSE 100 index was trading around 15 points higher when he stood up, which is where it stood little more than half an hour later after he sat down.

A few eyebrows were raised when he repeated his economic growth forecast for next year of between 3% and 3.5%.

One leading City economist said: 'His forecast remains unchanged and is at odds with existing forecasts elsewhere, including that of the OECD. If growth does come in at 3.25%, then it is inevitable interest rates will have to rise by as much as 1%.'

Brokers say that would hurt consumers and householders and could result in greater stock market volatility.

The Footsie ended the day 15.50 higher at 4751.20 despite a sharp fall in Britain's biggest company BP, down 16½p at 515½p on the back of fresh weakness in the dollar and the biggest one-day fall in the oil price for more than three years. Wall Street ran into light profit-taking this afternoon following yesterday's strong gains.

As traders are quick to point out, every penny fall in BP is the equivalent of a point off the index.

Electronic parts group Cookson came close to its low for the year with a fall of ¼p to 33½p, amid suggestions it may soon be going cap in hand to shareholders. The group is back on the growth track after three years of losses, but City gossips say it may have to ask for extra funds to maintain the recovery.

Two years ago, Cookson, staggering under debts of £750m, raised £278m by way of a heavily-discounted rescue rights issue at 25p.

Runners and riders for next week's quarterly meeting of the FTSE Index Review Committee have started jostling for a place in the top 100. But at the moment, it looks a one-horse race, with sugar maker Tate & Lyle, 6p dearer at 480p, short odds for a return to the top flight.

It is in 90th place with a market value of £2.37bn, tucked behind restaurants and hotels chain Whitbread (£2.38bn). The T&L share price has climbed from 340p since the summer. Sales of its artificial sweetener Splenda have been booming.

In fact, last week the group said it was unable to supply any new US customers until early in 2006.

Automotive engineer Tomkins, 1¼p firmer at 250½p in 109th, looks most likely to get the chop from the Footsie following a helter-skelter performance of late. The company is valued at less than £2bn.

But packaging specialist Bunzl, 6¼p cheaper at 438p, is also vulnerable in 108th after dropping from 485p since May.

National Express slipped 1½p to 754½p after broker UBS lowered its recommendation from buy to neutral, although it has raised its 12-month target from 225p to 245p.

City speculators caught a cold after chasing SkyePharma to within a whisker of its year's high on talk that the loss-making drug delivery group would soon become the target of a £500m bid.

Newspaper reports claimed the group's Australian founder, Ian Gowrie-Smith, had been approached about his remaining 1.3% stake. But the price came rattling back to trade 3¼p down at 67p after a spokesman for the company insisted: 'We are not about to be taken over by anyone and we're not in talks.'