The FTSE 100 closed at 10,881.90 on Friday, capping a 3.1% weekly gain that traders described as the strongest run for Britain's blue-chip index since early April.
Defensive consumer names led the bid. British American Tobacco rose 2.1% on the week while Diageo added 1.9%, helping beverages and tobacco outperform broader cyclicals that had sold off alongside US technology.
Defence and industrials catch a bid
BAE Systems and Babcock International were among Friday's top risers on the session, up 2.6% and 3.6% respectively according to exchange data aggregated by AJ Bell. WPP also gained, climbing more than 3% as advertising names recovered from earlier weakness.
Homebuilders added more than 6% across the week after Chancellor John Healey used a broadcast round to reaffirm fiscal discipline, easing fears of a sudden tax grab on property-linked earnings ahead of the 28 October budget.
Banks wobble on levy chatter
NatWest and Lloyds Banking Group slipped on Friday after reports that Healey was weighing a bank surcharge in the autumn statement. The sector recovered part of its losses by the close, but the episode showed how sensitive domestic lenders remain to budget leaks.
Scottish Mortgage Investment Trust and Polar Capital Technology Trust were among the fallers, reflecting continued profit-taking in growth and AI-linked vehicles after a volatile month for US megacap earnings.
Flows and rate expectations
Morningstar data cited in market commentary showed UK large-cap ETFs attracting an estimated $3.38 billion of net inflows year to date, the highest annual pace since 2020. Analysts said part of that flow is performance-chasing, part a deliberate tilt away from concentrated US technology exposure.
Bank of England Governor Andrew Bailey said second-round inflation signs looked limited ahead of this week's CPI release, but derivatives markets priced in roughly four rate increases over the next year according to LSEG data — a hawkish backdrop for gilt yields and bank margins.
Monday's open
With US markets closed for a holiday Monday, London traders looked to Asia and continental Europe for direction. The immediate technical picture is a index pressing toward the upper end of its 52-week range after reclaiming the 10,800 handle, with defence and staples still acting as the week's safety trade.
Sectors to watch into budget week
Medical equipment and services names added 6.9% on the week according to Reuters sector tables, helped by stable earnings and defensive positioning. Miners that led earlier autumn rallies cooled as commodity traders weighed Middle East supply risks against Chinese demand data due this week.
Currency moves matter for the FTSE: roughly two-thirds of index earnings are denominated outside sterling, so a firmer pound can cap index gains even when dollar earners beat expectations.