LONDON: UK shares advanced on Friday, driven by gains in miners and banks, with the indexes posting weekly gains as investors remained optimistic about potential interest rate cuts from the Bank of England after recent economic data.

The FTSE 100 ended up 1.5%, logging its biggest daily gain in four months. The mid-cap FTSE 250 added 0.5%.

Both indexes snapped a two-week losing streak, with the blue-chip FTSE 100 gaining nearly 2% on the week.

Industrial metal miners led gains with an advance of 2.9%, tracking the increase in base metal prices on expectations of US Federal Reserve rate cuts.

All major sectors traded in the green, with banks also among top gainers, up 2.5%.

Shares of Natwest jumped 7.4% after the lender confirmed Paul Thwaite as its permanent chief executive on Friday and reported forecast-beating profit for 2023.

UK retail sales surged by a stronger-than-expected 3.4% in January, data showed on Friday, yet it did little to dampen market optimism.

“Firstly, this is just one month’s numbers and given how weak retail sales have been until now, we will need more evidence that consumption really is recovering,” said Stuart Cole, chief macro economist at Equiti Capital.

“And secondly, the growth numbers this week were pretty terrible and are at the forefront of the markets thinking at the moment.” That included data indicating softer inflation and the economy slipping into recession, which has bolstered hopes that the BoE would cut rates from its nearly 16-year high levels.