London stocks log sharp weekly declines as rate hike pressures mount

British equities slipped on Friday with homebuilders leading declines, rounding off a week filled with losses after the Bank of England's bumper rate hike, while drugmaker GSK jumped after reaching a settlement in its heartburn drug litigation, reports Reuters.
The benchmark FTSE 100 fell 0.5 per cent, while the FTSE 250 mid-cap index lost 1.5 per cent for the day.
Both indexes logged steep weekly declines, with the FTSE 100 posting its worst weekly performance since the US banking turmoil in March, while the FTSE 250 recorded its worst weekly showing in over a year.
Rate-sensitive homebuilders were the top losers this week after the BoE raised its bank rate by an unexpected 50-basis points on Thursday in its bid to curtail runaway inflation.
Persimmon, which is part of the blue-chip FTSE 100, dropped 4 per cent after HSBC downgraded the homebuilder's rating to "hold" from "buy", while the broader index was down 2.9 per cent.
"The reason why interest rate hikes tend to bite quicker in the UK is because the terms of mortgage rates reset much more quickly," said Steve Sosnick, chief strategist at Interactive Brokers.