UK stocks set for weekly declines as oil prices soar

Oct 23 (Reuters) - UK stocks were set for weekly declines on Friday, as oil prices hit over five-month highs this week, weighing heavily on risk appetite, while investors parsed a slew of corporate earnings and economic data through the week.

The blue-chip FTSE 100 index .FTSE fell 0.5% to 10,670 points by 1020 GMT. The midcap FTSE 250 .FTMC was up 0.1%, but was set for its sharpest weekly fall in nearly six weeks.

• Oil prices hit their highest levels in over five months, with Brent crude trading close to $114 a barrel. This lifted energy shares .FTNMX601010 2%

• Aerospace and defence shares .FTNMX502010 dropped 4.1%, falling to their lowest levels since late May, with Rolls-Royce RR.L bottoming the FTSE 100 with a 6.4% slide

• French rival Safran SAF.PA dropped 8% on worries that a slowdown in aftermarket sales growth could continue into 2027, with airlines cutting capacity amid high fuel prices

• Bank .FTNMX301010 and healthcare .FTNMX201030 sectors fell 1% and 1.7%, respectively, further bogging down the index

• Rising oil prices have spurred inflation concerns in the global economy, with domestic data this week showing price pressures increased more than expected in September

• An interest rate hike by the Bank of England in November is largely priced in, with the data supporting the case

• Elevated oil prices, growing bets on rate hikes and uncertainty ahead of the budget have set the indexes up for weekly declines

• British retail sales volumes fell 0.4% in September from August, worse than the 0.1% decline expected by economists, data showed on Friday

• Separate data showed consumer confidence plunged in October, its steepest monthly fall since the pandemic

• Markets will be looking forward to finance minister John Healey's budget next week

• Among individual movers, insurer Lancashire Holdings LRE.L fell 4% after Barclays cut its rating to "underweight" from "equal weight"