British equities concluded the trading week in the red, with London's FTSE 100 down 1.72% on Friday's close, as investors assessed the latest corporate updates and the growing political uncertainty in the UK.
"Financial markets have responded to renewed UK political turmoil by ramping up bets on Bank of England tightening ... Almost three rate hikes are priced before year-end, almost identical to what's expected from the European Central Bank. We remain unconvinced. We're now forecasting one rate hike from the BoE in June, but only narrowly," ING said. "Though Prime Minister Keir Starmer is fighting on, investors are increasingly pricing a leadership contest that leaves Labour shifting left, loosening fiscal rules and increasing borrowing."
In corporate news, Centrica's (CNA.L) British Gas subsidiary agreed to pay 20 million pounds sterling into a voluntary redress fund to settle a probe by the UK's Office of Gas and Electricity Markets, or Ofgem, into legacy prepayment meter practices. British Gas will also write off up to 70 million pounds in energy debt for customers in vulnerable situations as part of the settlement package. Centrica's shares lost 6.40% at closing.
"It is clear that British Gas fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM installed without consent, and it's right that they've taken action to put things right. Because of our action customers will receive a substantial package of redress, compensation and debt write off," Ofgem Chief Executive Officer Tim Jarvis said.
Meanwhile, Hiscox (HSX.L) jumped 12.32% to become the blue-chip index's top performer amid chatter that its Canadian peer Intact Financial Corp. is looking at potentially acquiring the London-listed specialty insurer, according to Insurance Post.
The UK economic calendar was empty for the day, but the week ahead will see a barrage of private sector and economy-related data, including the April inflation rate figures, along with the S&P Global UK Manufacturing PMI data for May.