UK stocks slip as Trump reignites tariff worries

(Reuters) -British equities slipped on Friday, as renewed trade tensions after U.S. President Donald Trump recommended a 50% tariff on goods from the European Union overshadowed positive UK economic data.

Sterling traded at its highest in over three years, adding pressure to the UK's export-heavy benchmark share index.

The FTSE 100 slipped 0.2%, though it notched a second weekly gain.

However, the blue-chip index fell less sharply than its European peers as Britain is no longer an EU member following the Brexit referendum in 2016 and the country also clinched a limited bilateral trade deal with the United States earlier this month.

The domestically-focussed midcap index fell 0.4%, posting its first weekly decline in seven weeks.

Stocks came under pressure earlier this week as concerns over rising debt in the United States and a higher-than-expected UK government budget deficit dampened investor sentiment.

The benchmark 10-year gilt yield eased on Friday along with its U.S. counterpart after surging earlier this week as the Republican-controlled U.S. House of Representatives passed a sweeping tax and spending bill.

On the day, data showed sunny weather boosted British retail sales in April and households grew cheerier this month.

However, UK retailers faced a double-digit rate increase at the July insurance policy renewals after recent cyberattacks, with Marks and Spencer's insurers expected to take a full loss on its 100 million pound ($133.6 million) tower.

Shares of the retailer fell 2.3%.

Games Workshop slipped 2.8% after Peel Hunt downgraded the miniature war-games maker, saying it expects U.S. tariffs to cost around 10 million pounds.

Keeping losses in check, the previous miners index gained 3.5%, tracking higher gold prices. [GOL/]

Investment platform, AJ Bell was the top gainer on the FTSE 250 index, up 8.4%, after posting a 12% year-on-year rise in half-yearly profit on increased client activity.

(Reporting by Sanchayaita Roy, Twesha Dikshit and Ragini Mathur; Editing by Leroy Leo and Emelia Sithole-Matarise)