(Reuters) – UK stocks were lower on Friday, with the FTSE 100 easing from a record high, as the pound recovered ground and investors tread cautiously ahead of a closely watched U.S. jobs report.
The FTSE 100 lost 0.2%, while the mid-cap FTSE 250 was down 0.3% and set to end the week down slightly.
A recovery in the pound also weighed on gains for the export-heavy blue-chip index.
Shares of Legal & General leapt 5.4%, the biggest individual gainer on the FTSE 100, after the insurer sold its U.S. protection business to Japan’s Meiji Yasuda for $2.3 billion in cash. The Japanese firm will also take a 5% stake in L&G.
The FTSE 100 was set to end the week 0.4% higher and closed at a record high on Thursday, lifted by upbeat corporate earnings and hopes for further rate cuts from the Bank of England after the central bank cut rates by 25 basis points.
However, highlighting the challenges faced by the UK economy, policymakers halved their 2025 economic growth outlook while flagging that inflation would be nearly double the bank’s 2% target this year.
“Forecasts were hawkish – embedding, we think, a fair degree of inflation persistence, the messaging was dovish – centering on downside risks to growth and reaffirming that the MPC will look through the near-term spike in inflation,” Morgan Stanley analysts wrote.
“We see a further cut in May and Bank Rate at 3.5% by year-end.”
Investors now await U.S. employment data for signals on the economic and monetary policy outlook in the world’s largest economy, in a week that has seen global markets roiled by uncertainty over President Donald Trump’s tariff plans.
An index of homebuilder stocks led sectoral declines, down 2.2%. Data from mortgage lender Halifax showed British house prices jumped by 0.7% in January, more than the 0.2% forecast by economists polled by Reuters.
Precious metal miners < gained 0.7% on the day and was on pace for weekly gains of over 6%, the best week since October, as gold prices hovered at record highs.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Tasim Zahid)
