By Johann M Cherian
(Reuters) -UK stocks gained on Friday after data showed retail sales unexpectedly rose in April, highlighting resilience in consumer spending despite elevated inflation, while miner Rio Tinto posted its best day in more than a month on a brokerage upgrade.
Retail sales volumes rose 0.5% in April after a 1.2% fall in March, as per an official report. Sales volumes over the three months to April grew by the most since mid-2021.
The pound added 0.2% after the data.
“While the outlook for retail sales appears to be improving, we expect further rises in interest rates, from 4.50% now to a peak of 5.25%,” said Ashley Webb, UK economist at Capital Economics.
“That will mean real consumer spending is more likely to decline later this year than rise.”
The blue-chip FTSE 100 rose 0.2%, boosted by a 3.8% jump in Rio Tinto after Morgan Stanley turned bullish on the stock.
The broader industrial metals mining sector also climbed 3.1%.
AstraZeneca Plc added 0.7% after the drugmaker said a combination of its cancer drugs when added to chemotherapy showed positive results in a late-stage trial in patients with advanced or recurrent endometrial cancer.
The FTSE 250 shed 0.2% by 0827 GMT.
Both the FTSE indexes are set for weekly declines of more than 2% each, their worst weekly drop in over a month.
Disappointing domestic inflation data and U.S. debt deal uncertainties dominated investor sentiment this week, said Christopher Peters, trading floor manager at Accendo Markets.
ASOS Plc reversed gains and was down 0.5%, after the fashion retailer announcing planned to boost its balance sheet.
Tech firm Kin & Carta PLC tumbled 8.3% on slashing annual revenue expectations.
XLMedia PLC slumped 17.8% on lower annual sales expectations.
(Reporting by Johann M Cherian in Bengaluru; Editing by Shailesh Kuber and Rashmi Aich)