By Julien Ponthus
LONDON (Reuters) - UK shares lagged their European peers on a trade war relief rally on Thursday, after better-than-expected UK retail data boosted the pound which acts as an accounting drag on their foreign revenues.
At 0914 GMT, the FTSE 100 <FTSE> was up 0.08 percent while the pan-European STOXX 600 <.STOXX> rose 0.35 percent.
While analysts had expected a strong spring and summer to come to an end, British shoppers kept up their spending spree in August, despite the end of the World Cup, and showed no sign that the approach of Brexit was making them cautious. [nUKLKKEE51]
Worries about the future of the UK retail industry and continued political uncertainty remain however.
"With incomes still under pressure, and consumer caution only likely to build as 'no deal' Brexit warnings multiply, we think the high street faces a challenging autumn", ING economists said in a note.
A $3.2 billion share buyback program from Rio Tinto <RIO.L> boosted the shares of the miner by around 1.8 percent.
Basic materials and financials were the main sectors contributing to the FTSE's rise.
GVC Holdings <GVC.L> was down 2.8 percent with its shares now trading without entitlement to their latest dividend pay-out.
Shares in Diageo <DGE.L> were flat as it reported in line results despite a hit from foreign exchange movements.
"The year has started well and performance is in line with expectations", Jefferies commented about the world's largest distributor of spirits.
There were sharper moves on small and mid-sized companies.
Lower levels of market volatility hurt quarterly revenues at trading platform IG Group <IGG.L>, sending the stock down 7.4 percent.
British construction and services company Kier Group <KIE.L> was up 4.1 percent after it said a hefty order book lifted its underlying full-year pretax profit 9 percent.
Safestyle <SFES.L> fell 12.9 percent after the window and door retailer and installer warned on profits and said it did not anticipate an "immediate recovery" back to 2016 and 2017 levels of financial performance.
Inmarsat <ISA.L> shares climbed 1.5 percent after the British satellite company said it would collaborate with Japan's Panasonic Avionics to provide in-flight broadband for commercial airlines.
(Julien Ponthus; Editing by Jon Boyle)