By Khushi Singh and Bansari Mayur Kamdar
(Reuters) -Britain’s FTSE 100 fell on Friday, with the benchmark index posting its second weekly drop after a series of underwhelming earnings updates, with NatWest’s gloomy outlook the latest to weigh on banks.
The FTSE 100 closed 0.9% lower, with consumer staples like Unilever and Diageo falling more than 2% each and pulling the index lower.
Shares of NatWest slumped 11.6% to the bottom of the FTSE 100, and suffered their biggest one-day drop in seven years since Brexit in 2016, after a profit downgrade and as it faced regulatory scrutiny over potential breaches in its “debanking” of former Brexit party leader Nigel Farage.
The banks index shed 2.3% and ended the week 5.4% lower.
Focus turned to Bank of England’s interest rate decision next week, after the European Central Bank stood pat on interest rates on Thursday, as expected.
“We expect the Bank of England to keep rates on hold for a second consecutive month. Inflation is still too high, but we expect more progress over coming months and that should enable some gradual rate cuts from summer next year,” economists at ING Economics said in a note.
Drugmakers AstraZeneca and GSK fell over 2.5% each after French peer Sanofi’s downbeat forecast.
IAG beat forecasts with a strong third-quarter profit, but it flagged economic uncertainties and was unsure how the Middle East turmoil could affect bookings and jet fuel costs into next year.
Shares of the British Airways owner eased 0.6%.
The mid-cap FTSE 250 snapped a three-day losing streak to climb 0.5%, but still ended its sixth straight week lower.
(Reporting by Khushi Singh and Bansari Mayur Kamdar; Editing by Sherry Jacob-Phillips and Jonathan Oatis)