UK stocks post weekly declines as energy and financials lag

Dec 5 (Reuters) - UK's FTSE 100 edged lower on Friday, logging a sharp weekly decline, dragged down by energy and financial shares, even as investor expectations for a U.S. Federal Reserve rate cut next week grew after key U.S. inflation data.

The blue-chip FTSE 100 closed 0.5% lower, while the midcap FTSE 250 was little changed with both ending the week in the red.

Oil & gas stocks led the sell-off, tracking oil prices. Shell was down 1.4%, while fell 2.6%. Bank of America Global Research cut the latter's rating to "underperform" from "neutral".

Heavyweight banks dropped 1.2%, with Standard Chartered, Barclays and HSBC falling over 1% each. 

Aerospace and defence shares fell, with BAE Systems and Rolls-Royce <RR.L> marginally down.

On the flip side, Personal goods shares were among top gainers, with Watches of Switzerland rising 2.6% after three brokerages raised their price targets. Burberry added 1.4%.

Chemicals shares gained 1%. 

The investment banking and brokerage services index rose 1.1% with Investment firm 3i Group gaining 2.5%.

Among individual shares, AstraZeneca added 0.6%, snapping a six-day losing streak.

Trustpilot shares jumped 13.3% after a Morgan Stanley upgrade despite short-seller claims. The global review platform said it rejected allegations made by short-seller Grizzly Research.

Investor expectations for a Fed rate cut have increased since U.S. personal consumption expenditure data (PCE) - the Fed's preferred gauge of inflation - suggested a loss of momentum in the economy. 

(Reporting by Utkarsh Tushar Hathi and Twesha Dikshit in Bengaluru; editing by Vijay Kishore and Mark Heinrich)