UK shares among worst performers in Europe

By Jennifer Hill

LONDON (Reuters) - Britain's stock market has been one of the worst performing in the European Union over the past five years, rising by less than half of the overall average, data shows.

The UK was the second-worst performing stock market in the EU from April 2003 to last month, rising a total 55 percent or 9 percent per year, according to figures from Halifax Financial Services.

Only Italy performed worse: its main stock market index is up 42 percent over five years, or 7 percent per year.

That compares to an average stock market performance of 118 percent across the 27 EU member countries over the past five years, or 17 percent per annum.

Eight of the 10 EU countries with largest growth in stock prices since 2003 are in Eastern Europe.

Bulgaria tops the table with growth of 352 percent during the past five years -- more than six times greater than the growth of British stock prices.

It is followed by Lithuania (309 percent), Romania (299 percent), Luxembourg (263 percent) and Austria (247 percent). Making up the rest of the top 10 are Poland, the Czech Republic, Hungary, Slovakia and Estonia.

"These countries have clearly benefited from greater capital flows, especially foreign direct investment and the further integration of their financial markets within the EU," said Martin Ellis, chief economist at Halifax. "This has boosted share prices substantially."