FOLLOWING the heaviest winds since the 1987 hurricane, London's marketmakers battened down the hatches against the possibility of some stormy financial weather.
To begin with, the Dow Jones Industrial Average was off 37 points at Monday night's close. Then, yesterday morning, Germany's six leading economic research institutes said a tightening of interest rates should be considered if the growth of M3 - the country's main measure of money - remained above target.
Their comments follow hints from the Bundesbank last week that the downward rate trend may be over.
Brokers with long memories and a superstitious nature were recalling that it was a German interest rate rise which sparked off the 1987 crash.
Closer to home, government bonds were initially weaker on the back of stronger than expected net new consumer credit data for September. Credit was up a net £1.067 billion sterling against a consensus forecast of £830 million.
Mr Neil Parker, economist with the Royal Bank of Scotland, said the strength of the consumer credit data was just one more piece of evidence suggesting the economy was "really beginning to motor". Also, UK M4 grew at 9.9 per cent against expectations of 9.6 per cent.
Although the FT-SE 100 index recovered from the low point reached just before lunchtime it still ended the day 31.8 down at 3,993.5 with falling stocks leading risers by 69 to 25. The FT-SE 250 index dipped 8.4 to 4,434.7.
There was some support from Wall Street early in the afternoon on the back of lower than expected data for labour costs, but that evaporated later.
Even the late rumour of a bid for Pearson, the media conglomerate, and some good figures from Thames Water failed to excite the market.
And the focus soon shifted back to today's monetary policy meeting between the Chancellor of the Exchequer and the governor of the Bank of England. NatWest economist Mr Geoffrey Dicks summed up the feeling of many specialists when he said: "The heart says one thing, the head says the other. We think the Chancellor should raise rates back up to 6 per cent this week. We also think he won't."
Economists and analysts are also anxiously awaiting figures from four big Footsie companies - Shell Transport, BAT Industries, Sainsbury and Pilkington - which between them represent 7 per cent of the blue chip index.
