UPDATE 2-FTSE 100 hits five-month high on China GDP and weak pound

London's FTSE 100 rose to a more than five-month high on Friday as China's economic growth met expectations and the pound slid after weak British retail sales raised the prospect of an imminent interest rate cut by the Bank of England. The exporter-heavy index surged 0.9%, boosted by miners, as China's 2019 growth came in within Beijing's target range and signalled an improvement in business sentiment following a de-escalation of the trade war with the United States.

"The Phase 1 (trade) deal has partially lifted the cloud of uncertainty hanging over the economy," OANDA analyst Craig Erlam said. "If these numbers are anything to go by, 2020 could be a far more productive year for the world's second-largest economy." Companies that book most of their earnings in the U.S. dollar such as AstraZeneca, GlaxoSmithKline and Diageo also rose, helping the blue-chip bourse bag its first weekly gain of the new decade.

British Airways-owner IAG climbed 5% to its highest level since September 2018 after it lifted a restriction on non-EU investors' ability to buy its stock. NMC Health advanced 8% after an independent review committee tapped a former FBI director to compile a report on allegations by U.S. firm Muddy Waters.

The FTSE 250 rose 0.8%, as more domestically-exposed stocks firmed amid the increasing likelihood that the BoE would loosen policy after data showed consumers did not increase their spending for the fifth straight month in December. "Seeing as the December report includes the important Christmas period, the sharp fall is particularly distressing," said CMC Markets analyst David Madden.

The rally in domestic stocks and food processing company Cranswick, which jumped 9.4% to a record high after it forecast annual profit above market expectations, helped the midcaps to a 1.5% gain for the week. But motor insurer Hastings slid 4% after it forecast a slump in annual earnings and a lower dividend, sending its shares to their lowest level since July 2016.

"A big challenge for the company is that motor insurance is a very competitive market," said Russ Mould, investment director at AJ Bell. "Until the motor insurance market turns, it could be very difficult for Hastings to get out of first gear."

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