By Pranav Kashyap and Shubham Batra
(Reuters) -London shares ended the week on a positive note after domestic inflation fell to the Bank of England’s 2% target earlier this week, raising expectations for an August rate cut but a hot reading in retail sales tempered some of the expectations. that optimism.
The stock fell 0.4% that day, while posting a weekly advance of 1% and breaking a five-week losing streak.
The midcap fell 0.3% on the day but held up somewhat to post its first weekly gain in four weeks.
UK retail sales rose 2.9% in May, recovering sharply from a revised 1.8% decline in April. Economists had predicted from a poll that sales volumes would rise by 1.5%.
Meanwhile, British businesses are growing at the slowest pace since the economy entered recession last year as some companies postponed big decisions until after the July 4 election.
Investor sentiment in Britain is gradually improving after comments from the BoE on Thursday put into play an August rate cut and inflation returned to the 2% target in May for the first time in almost three years.
Markets are currently pricing in a 47% chance of a rate cut in August.
The personal goods sector advanced 0.5% on Friday, making it the best performing sector, while banks were the worst performers, down 1.6%.
Among individual movers, shares in Britvic rose 7.8% after the soft drinks maker rejected a revised, unsolicited potential cash offer from Carlsberg (CSE:) Group.
United Utilities (OTC:) gained 1.6% after JPMorgan upgraded the stock from ‘neutral’ to ‘overweight’.
B&M fell 1.7% after Morgan Stanley cut its rating from ‘equalweight’ to ‘underweight’.
