UK shares fell on Friday, tracking global markets on bets of more aggressive US rate hikes after inflation data, but the mid-cap index was set for its best week of 2022 as data showed Britain's economy had a smaller hit from the Omicron variant.
The FTSE 100 slipped 0.9%, while the mid-cap 250 index fell 1.0%. The blue-chip FTSE 100 has also steadily outperformed the pan-European STOXX 600 index so far this year, given its heavily-weighted banking firms and commodity stocks.
The FTSE Mid 250 index was last up 1.3% for the week, best weekly performance so far this year.
Data showed Britain's economy shrank by a less-than-expected 0.2% in December, and suggested that despite the setback cause 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 that the question now is whether 2022 will see the UK shake itself off after December's blip or will supply constraints and rising prices keep the lid on household consumption, that has been a key factor in GDP growth.
The overnight downbeat mood spilled over from Wall Street as investors digested the possibility of aggressive rate hikes after hawkish comments from St. Louis Federal Reserve Bank President James Bullard in the wake of the hottest US inflation reading in nearly 40 years.
British American Tobacco shares rose 0.3%, 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 3.0% to the bottom of FTSE 100 after Jefferies cut its target price.