THE markets are still lacking any real direction following various reports coming out this week.

The Organisation for Economic Co-operation and Development (OECD) released a survey which forecast that Britain is set to avoid recession while the rest of the world continues to head towards it.

The UK is expected to recover next year and should be the fastest-growing Group of Seven (G7) economy for the second successive year.

At the same time, a key figure from the Bank of England warned that world stock markets were still very vulnerable to a further slump. This has led some of the City's biggest institutional investors to plan a huge sell-off of shares.

Also, the minutes for this month's interest rate committee meeting came out this week, showing that the Monetary Policy Committee voted eight to one to cut rates by 0.5 per cent to four per cent earlier this month.

Although a cut was needed, it is feared that this strong cut might send out the wrong signals that the UK economy is in as bad a state as the US.

An even deeper cut of 0.75 per cent was considered but it was decided that this was too great and would result in damaging consumer confidence rather than boosting it.

Among risers this week, P&O Princess Cruises announced a £4.3bn merger with Royal Caribbean Cruises to create the world's biggest holiday cruise company. The new enlarged group will have a total of 41 ships with 75,000 berths. The merger should produce combined revenues of £3.6bn and generate cost savings of more than £71 million. The shares surged.

B&Q to Comet group Kingfisher has been showing a good recovery lately and released its results this week.