eb 10 (Reuters) - UK's FTSE 100 closed lower on Friday as worries of high interest rates overshadowed data showing the British economy narrowly avoided entering a recession in the fourth quarter, while a rise in energy shares limited declines.
The blue-chip index (.FTSE) shed 0.5%, backing off from record highs hit on Thursday, and posted a weekly fall of 0.31%.
Declines in the FTSE 100 were still smaller than those of European stocks, as the STOXX 600 index (.STOXX) closed about 1% lower.
Even as upbeat earnings and higher commodity prices aided sentiment earlier in the week, worries persisted about the Federal Reserve's aggressive tightening cycle, and as officials from the Bank of England appeared split about the need for further rate hikes.
The FTSE 350 oil & gas index (.FTNMX601010) jumped nearly 2.8% on higher crude prices, while riskier plays including travel and leisure stocks (.FTNMX405010) shed 3.3%.
Data showed Britain's economy showed zero growth in the final three months of 2022, meaning it narrowly avoided entering a recession, in line with what most economists were anticipating.
"The UK has escaped recession by the skin of its teeth," said Jeremy Batstone-Carr, European strategist at Raymond James Investment Services.
"However, whether we are officially in recession will not make much difference to most people – it will simply feel like a continuation of the present sluggishness and cost-of-living woes."
The domestically-oriented FTSE 250 index (.FTMC) closed 1.2% lower. It was down 2.7% for the week, its steepest weekly loss in more than four months.
Standard Chartered (STAN.L) fell 5.0% after First Abu Dhabi Bank (FAB) (FAB.AD) said it was not currently evaluating an offer for the British bank.
Barclays PLC (BARC.L) slipped 2.0% on a report that Britain's financial regulator is investigating the bank for suspected failings in its compliance and anti-money laundering systems.
