FTSE 100 retreats from peak as growth concerns weigh

(Reuters) -The UK's FTSE 100 eased off record highs on Friday, as investors grew cautious heading into the weekend on concerns about slowing domestic growth and U.S. tariff policies.

The exporter-heavy FTSE 100 and the domestically focused FTSE 250 index both dipped 0.4%. 

Still, the FTSE 100 logged its biggest weekly percentage gain in two months, led by miners as President Donald Trump's threats to impose tariffs on imported copper drove a surge in metals prices.

Data showed Britain's economy contracted unexpectedly for a second month running in May, compounding the government's woes as it navigates growing global turbulence.

"It will now take something quite special for the UK to avoid an outright contraction in GDP in Q2, which doesn't appear at all likely quite frankly given the perfect storm of downside risks," said Matthew Ryan, head of market strategy at global financial services firm Ebury.

The data supported bets of the Bank of England cutting interest rates next month, with traders pricing in a 77.2% chance of a 25 basis point cut, according to LSEG data.

Across the Atlantic, Trump ramped up his tariff assault again, saying the U.S. would impose a 35% levy on Canadian imports next month and blanket tariffs of 15% or 20% on most other trading partners. The EU was waiting for its own tariff letter.

Precious metal miners led the gains among UK sectors, with safe-haven gold supported by the expanding trade war. 

BP shares rose 3.4% to top of the blue-chip index after the energy giant forecast a higher upstream output production for second-quarter.

SSP Group was the heaviest faller on the midcap index, falling 8% after UBS downgraded the restaurant chain operator to "sell".

($1 = 0.7384 pounds)

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(Reporting by Twesha Dikshit and Ankita Yadav; additional reporting by Rashika Singh; Editing by Nivedita Bhattacharjee)