Downbeat report fails to affect FTSE

Investors have boosted the FTSE 100 share index this afternoon (August 3rd), even though a new report has cast further doubt over the UK's economic future.

As of 13:15 BST, London's leading stock exchange had risen 1.42 per cent on the day to a total points level of 5,742.92 as trading experts were seemingly unperturbed by new figures from the National Institute of Economic and Social Research (NIESR).

According to the think tank's latest research, Britain will experience gross domestic product contraction of 0.5 per cent in 2012 due to a combination of internal and external factors.

"The deterioration in the UK economy has been more pronounced than even we expected," it noted.

For instance, the NIESR expects issues such as ongoing domestic austerity measures, as adjustment in the private sector has been "exacerbated by fiscal consolidation and a dysfunctional financial system".

Moving forward, the group believes the eurozone debt crisis will carry on affecting Britain.