(Reuters) – British midcap stocks posted their biggest weekly decline in more than a year on Friday, as rising borrowing costs on the back of higher inflation expectations and worries about Donald Trump’s return to the White House hurt sentiment on risk.

which is made up of companies that closely track the domestic economy, fell 1.4% to an eight-month low.

The index recorded a 2.8% weekly drop, its weakest since October 2023, hurt by a sharp rise in British borrowing costs that fueled concerns about public finances after the big spending plans announced by the government.

Investors are pointing to this week’s big moves in bond markets as markets brace for inflationary policies once Trump returns to office in the US

Further pushing yields higher on Friday, stronger-than-expected US payrolls data prompted traders to scale back bets on a rate cut from the Federal Reserve this year. .

UK government bond yields remained high, with the 10-year gilt hovering near its highest level since 2008, while the 30-year stood at its highest level since 1998.

The exporter-heavy fell 0.9% but took a third consecutive weekly advance, supported by a sharp fall in sterling throughout the week.

Oil and gas stocks were a bright spot, up 0.5%, crude prices rallied more than 4% to hit their highest level since October as traders focused on potential supply disruption from massive Russian sanctions. (O/R)

Insurers fell 2.3%, with those with heavy exposure to Los Angeles wildfires such as Beazley and Hiscox (LON:) leading losses.

Alliance Pharma (LON:) jumped 38% after it agreed to be acquired by asset management firm DBAY Advisors in an all-cash deal valuing the healthcare group at 349.7 million pounds ($430 million).