The FTSE 100 ended in the green on Friday, outperforming European peers, despite downbeat economic news ahead of next week’s Budget.
The index closed up 12.06 points, 0.1%, at 9,539.71.
The FTSE 250 ended 20.98 points lower, 0.1%, at 21,363.37, while the AIM All-Share fell 5.56 points, 0.8%, to 735.64.
For the week, the FTSE 100 was down 1.6%, the FTSE 250 fell 2.1%, and the AIM All-Share declined 1.4%.
Figures showed a surprise drop in retail sales, higher government borrowing than expected and a slowdown in private sector activity.
The Office for National Statistics said net borrowing amounted to £17.4 billion in October, easing from £19.9 billion in September, but above an FXStreet cited forecast of £15.2 billion.
The figure topped a £14.4 billion Office for Budget Responsibility forecast outlined in March.
Meanwhile, the flash composite PMI fell to a two-month low of 50.5 points in November from October’s final tally of 52.2.
The flash manufacturing PMI rose to 50.2 points in November from 49.7 in October, a 14-month-high. But the services PMI fell to a seven-month low of 50.5 from 52.3 in October.
Meanwhile, retail sales fell 1.1% in October from September, the ONS said. They had been expected to tread water, according to consensus cited by FXStreet. They had risen 0.7% in September.
The data was seen as increasing the likelihood of an interest rate cut by the Bank of England in December although sterling was little moved.
Pantheon Macroeconomics chief UK economist Rob Wood said risks to growth forecasts now “lie to the downside”.
“Those downside growth risks along with sharply weaker inflation signals from the PMI cements a December rate cut from the (Monetary Policy Committee). We think the bar to rate setters holding in December will now be very high,” he added.
Mr Wood said a range of surveys give a consistent signal that the past couple of months of “tax hokey-cokey” ahead of the Budget is leading households and firms to pause spending and “wait-and-see who gets hit by the smorgasbord of tax hikes”.
Sterling was quoted at 1.308 dollars at the time of the London equities close on Friday, slightly lower compared to 1.309 on Thursday.
The euro stood at 1.150 dollars, lower against 1.153 a day earlier.
In European equities on Friday, the Cac 40 in Paris ended flat, while the Dax 40 in Frankfurt declined 0.8%.
In New York, markets were higher at the time of the London equity market close.
The Dow Jones Industrial Average was up 0.7%, the S&P 500 index was 0.5% higher, and the Nasdaq Composite was up 0.2%.
The yield on the US 10-year Treasury was at 4.07%, trimmed from 4.10% on Thursday. The yield on the US 30-year Treasury was 4.71%, narrowed from 4.72%.
Back in London, hopes of lower interest rates gave housebuilders a boost.
In addition, reports suggested next week’s Budget could include changes to Lisas, aimed at helping first-time buyers.
On the FTSE 100, Persimmon rose 4.7%, Barratt Redrow climbed 3.6% and Berkeley gained 2.2%.
Credit checking agency Experian rose 3.5% as Citi upgraded to ‘buy’ from ‘hold’.
The broker thinks margins at Experian’s North American business could surprise on the upside.
Babcock International gained 1.8% as it boosted its interim dividend and backed full-year targets, after trading improved in the first half.
The London-based aerospace and defence engineering firm posted £226.3 million in pretax profit for the six months ended September 30 – a 32% jump from £172.0 million the year previously.
Babcock declared a first-half dividend of 2.5p per share, up 25% from 2.0p.
Recent falls in US technology stocks weighed on Polar Capital Technology Trust, down 5.3% and Scottish Mortgage Investment Trust, down 3.1% as the initial boost from Nvidia results quickly fizzled out.
“Relief around Nvidia’s results didn’t last long as investors couldn’t shake their fears that the AI boom might have got ahead of itself,” said Dan Coatsworth, head of markets at AJ Bell.
“There is a lingering concern that the AI revolution might take longer than expected to truly transform the way companies do business.
“People in the late 1990s were right to predict the internet would change the world, they just had to wait a bit longer than initially thought, and that resetting of expectations was central to the bursting of the dotcom bubble,” he added.
On the FTSE 250, Hammerson rose 7.1% after buying the remaining 50% interest in The Oracle in Reading and raising guidance.
Hammerson raised its financial 2025 total gross rental income growth guidance to 19%, from the 17% previously guided.
Brent oil was quoted lower at 62.15 dollars a barrel at the time of the London equities close on Friday, from 63.44 late on Thursday.
Gold traded higher at 4,073.57 dollars an ounce on Friday against 4,058.47 on Thursday.
The biggest risers on the FTSE 100 were Persimmon, up 57.0p at 1,258.5p, Diageo, up 64.0p at 1,768.0p, Barratt Redrow, up 13.3p at 378.8p, Experian, up 114.0p at 3,353.0p and London Stock Exchange, up 272.0p at 8,602.0p.
The biggest fallers on the FTSE 100 were Melrose Industries, down 37.0p at 570.0p, JD Sports Fashion, down 4.4p at 72.9p, Polar Capital Technology Trust, down 24.0p at 433.0p, Glencore, down 14.0p at 335.0p, and Rolls Royce, down 41.0p at 1,038.0p.
Contributed by Alliance News
