LONDON: British equities ended Friday mixed, as gains in non-life insurers stocks were offset by a sell-off in automobile and parts shares, while weaker-than-expected retail sales data further tempered expectations over the timeline for rate cuts.

The FTSE 100 was flat, but marked its third weekly decline and the biggest in three months. The domestically focused FTSE 250 index reversed early gains to end the day 0.4% lower, also logging a weekly loss. Data showed British retailers suffered the biggest drop in sales in almost three years during December, raising the risk that the economy entered a recession in the fourth quarter. Retail sales volumes shrank 3.2% between December and November as people did their Christmas shopping earlier than usual. The numbers were worse than economists’ forecast for a 0.5% drop.

“The gloomy UK retail sales figures shouldn’t have been a surprise given the messages coming out of listed retailers over the past few weeks,” said Russ Mould, investment director at AJ Bell. The drop in retail sales comes after Wednesday’s stronger-than-expected UK inflation reading that tempered expectations around early interest rate cuts this year by the Bank of England.