LONDON (AFP) - The London stock market is eagerly awaiting next weeks emergency budget amid investor hopes that Britains new coalition government will outline clear plans to fix the nations huge public deficit. The British capitals FTSE 100 index of leading stocks rose 1.69 percent on the week to finish on Friday at 5,250.84 points. At 1130 GMT on Tuesday, British finance minister George Osborne will unveil his so-called emergency budget that is aimed at helping fix the nations massive state deficit. Most economists predict that Osborne will deliver large spending cuts and taxation hikes in an attempt to balance the books. A highly-anticipated emergency budget statement from the Chancellor of the Exchequer George Osborne is expected on Tuesday, said Hargreaves Lansdown analyst Keith Bowman. With government borrowing at levels not seen since the Second World War, the new coalition government is expected to outline more comprehensive plans to execute a multi-year reduction of national debt. Set against the backdrop of the eurozone debt crisis, financial markets have been on edge for months about the unhealthy state of the British public purse. The governments new fiscal watchdog has warned that state borrowing is set to reach 155 billion pounds in the financial year to March 2011. Britains public deficit had rocketed to a record-high of 156 billion pounds in the 2009-2010 fiscal year that ended in March, buckling under the pressure of banking-sector bailouts and recession-hit taxation revenues. Aside from the emergency budget, investors will keep an eye on developments surrounding troubled British energy giant BP. This week, BP bowed to White House demands to create a 20-billion-dollar fund to pay spill-related compensation claims and agreed to scrap its shareholder dividends this year. BP also agreed to sell 10 billion dollars of none-core assets. Investors have welcomed the removal of uncertainty that has dogged BP ever since the Deepwater Horizon oil rig, which it leased, sank on April 22, sparking an enormous oil leak.