By Joshua Franklin

LONDON (Reuters) – FTSE edged lower on Friday but looked likely to post its best month in seven after a three-week rally that raised it within touching distance of its all-time high.

Shares rallied strongly after hitting a 2014 low in early February, but have fallen 0.6 percent this week as political turmoil in Ukraine and new concerns about China’s economy have revived worries about emerging markets.

However, the 4.4 percent gain posted so far this month would make it the best February in 15 years, leaving the FTSE 100 just 2 percent below its record peak, set in 1999.

“On the balance, I think a lot of people are taking the view inflation is slowing down and interest rates are not going up soon and we should be buying on this basis,” said Beaufort Securities chief investment strategist Mike Franklin.

Also supporting the rally has been a decent earnings season, in which 69 percent of companies that have reported quarterly earnings so far have beaten or met expectations.

Financial services group Old Mutual was the FTSE’s top riser, up 5 percent, after it posted 15 percent growth in earnings on a constant-currency basis.

But earnings on Friday were mixed, with publisher Pearson down 6.1 percent after it warned that it expected earnings to fall in 2014.

It reported results within the range of already downgraded forecasts due to the hit from the deteriorating U.S. education market.

“They’re pretty awful figures. They’re trying to rebuild around this U.S. education division, which has caused a real weakness here,” ETX Capital head of trading Joe Rundle said.

“I wouldn’t want to be long. They’re betting on a losing horse. They don’t have the scale to compete in this industry.”

The FTSE 100 was down 16.17 points, or 0.2 percent, at 6,794.10 at 1137 GMT.

The FTSE outperformed continental European shares, which were knocked back by inflation data that dampened expectations the European Central Bank would consider additional stimulus measures on top of record-low rates.

After extreme weather in the United States that weighed on recent data, investors were looking to preliminary U.S. GDP figures to be released at 1330 GMT for clues about the pace at which the Federal Reserve will scale back its equity-boosting stimulus programme.

“I think it’s very difficult for the Fed at the moment. To some extent they’re flying blind in that they can’t really know for sure how the underlying economy is because the numbers are distorted (by recent weather),” Beaufort Securities’ Franklin said.

(Additional reporting by Alistair Smout, editing by Mark Heinrich)