Weaker pound takes FTSE 100 to best week in six months
FTSE 100 up 1.4%, FTSE 250 up 1.1%
British retail sales fall more-than-expected
Pound falls to a 6-month low
Flash PMI slides, first contraction in 13 months
Updates to market close
By Nikhil Sharma
Nov 22 (Reuters) -Britain's FTSE 100 recorded its biggest weekly gain in more than six months on Friday as a slide in sterling supported dollar earners, while banks came under pressure from weak business activity data.
The blue-chip FTSE 100 .FTSE ended the day 1.4% higher, and logged a 2.5% weekly rise, its best since May 7.
The pound GBP=D3 tumbled 0.6% to $1.25105 per dollar, its weakest since May, after data showed British business output in November shrank for the first time in more than a year, and retail sales also fell by much more than expected in October.
The currency's decline helped lift shares of UK-listed international firms such as AstraZeneca AZN.L, Unilever ULVR.L and Reckitt Benckiser RKT.L, which draw a major portion of their revenue overseas.
British finance minister Rachel Reeves announced a budget in late October which raised taxes on business and the wealthy, contributing to the first contraction in private sector activity in over a year.
"So, all this points to uncertainty and sort of a fragile outlook for the UK as a whole," said Daniel Coatsworth, investment analyst at AJ Bell.
"But overall, it's a strange situation where you have lots of negative economic data points that's weakened the pound, but is really good for the large amount of overseas focus companies that are listed in London."
However, banks including Barclays BARC.L, HSBC HSBA.L and Lloyds Banking Group LLOY.L dropped between 0.3% and 2.1%, weighed down by the gloomy data.
Traders expect the Bank of England to hold interest rates next month, but see more cuts coming next year. They now expect about 72 basis points of cuts next year, compared with 67 bps before the release of the data.
The FTSE 250 midcap index .FTMC rose 1.1% to a more than one week high.
Games Workshop GAW.L jumped 17.3% to an all-time high and was the biggest gainer on the midcap index after the miniature wargame maker's upbeat half-year forecast.
Reporting by Sruthi Shankar and Nikhil Sharma in Bengaluru; Editing by Devika Syamnath and Angus MacSwan
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