By Shreyashi Sanyal
-UK shares ended lower on Friday, tracking global markets betting on aggressive U.S. rate hikes, but the main indexes still marked their best week so far in 2022 as data showed Britain's economy suffered less than feared from the Omicron coronavirus wave.
The blue-chip FTSE 100 slipped 0.2%, while the mid-cap 250 fell 0.7%. The FTSE 100 has outperformed the pan-European STOXX 600 index this year, thanks to its heavy weighting towards banking and commodity stocks.
Despite weakness on the day, the FTSE 100 was up 1.9% and the FTSE Mid 250 up 1.6% for the week.
Data showed Britain's economy shrank by a less-than-expected 0.2% in December, suggesting that - despite the setback caused by the Omicron variant - GDP grew strongly across the fourth quarter.
"The last month of the year wasn't all doom and gloom ... and looking over the last quarter as a whole, there's plenty to be positive about," said Danni Hewson, financial analyst at AJ Bell.
Hewson added the question now was whether 2022 would see the UK shake off December's blip or whether supply constraints and rising prices would keep a lid on household consumption, which has been a key factor in GDP growth.
The downbeat mood spilled over from Wall Street as investors digested the possibility of aggressive U.S. rate hikes after hawkish comments from St. Louis Federal Reserve Bank President James Bullard in the wake of the hottest U.S. inflation reading in nearly 40 years.
British American Tobacco shares rose 3% after posting a rise in full-year revenue along with a dividend increase and a share repurchase programme worth 2 billion pounds ($2.71 billion) for 2022.
Valve maker Spirax-Sarco slid 3.8% after Jefferies cut its target price, while food ingredient maker Tate & Lyle jumped 9.5% on an upbeat earnings outlook.
($1 = 0.7381 pounds)