Britain’s FTSE 100 marked its longest weekly losing streak since March 2020 on Friday, as investors grappled with uncertainty around the outlook for interest rates and political turmoil in Europe.
The blue-chip FTSE 100 index slipped 0.2%, logging its fifth straight weekly decline.
The FTSE 250 midcap index also fell 0.2%, closing at its lowest level in over a month, marking a third straight week of losses.
The British markets were weighed down by several factors this week.
French President Emmanuel Macron’s decision to call snap elections, a hawkish projection from the U.S. Federal Reserve, and weaker-than-expected UK GDP data for April all contributed to the downturn.
The European parliamentary elections have soured the mood, particularly in France.
“It is natural if almost all of Europe is in the red today, the UK would not be immune,” said Steve Sosnick, chief strategist at Interactive Brokers.
The pan-European STOXX 600 closed 1.0% lower.
In the London market, personal goods stocks led broader declines with a 3.8% loss, falling to their lowest level since July 2010.
Investor focus is now on the domestic inflation report and the Bank of England’s (BoE) monetary policy meeting, the last before the July 4 election, due next week.
“Whether there is political pressure or not, I don’t think the Bank of England will cut rates in June because service sector inflation and wage growth are still too sticky,” said Fiona Cincotta, senior market analyst at City Index.
A BoE survey showed that the British public’s expectations for inflation cooled last month, and the highest proportion since the global financial crisis thought it would be best for the economy if interest rates fell.
Among single stocks, Tesco rose 2.5% after Britain’s biggest supermarket group reported a 4.6% rise in underlying quarterly sales in its home market and reiterated its forecast.
Crest Nicholson jumped 13.7% to top the FTSE 250 after the homebuilder said it rejected a 650 million pound ($828 million) revised unsolicited proposal from rival Bellway. Bellway’s shares slid 4.4%.