As London becomes the focus of the contemporary art world next week, observers will be scrutinising its affairs more closely than usual, to determine whether one of the most high-profile and fastest growing markets in the world is about to flounder.

The annual art market research index produced by Hiscox, the art insurer, shows that the value of contemporary art has risen by 55 per cent over the past 12 months, an acceleration of the trend over the past five years which has seen prices soar. But much of that price inflation has been fuelled by workers in the financial services industry such as hedge fund managers, boosted by high salaries and hefty bonuses. Now there is a fear that, in the wake of the global credit squeeze, prices will begin to fall.