NatWest down after warning that higher earnings may not last
British retail sales rise for January
FTSE 100 down 0.4, FTSE 250 off 0.5

Feb 17 Reuters UK39;s FTSE 100 fell on Friday, with banking stocks leading losses after lender NatWest forecast dour earnings, and as investors gauged the prospects of further monetary policy tightening by the U.S. Federal Reserve to tame inflation.

The bluechip FTSE 100 lost 0.4, but is set to post a weekly gain of 1.3.

The domesticallyfocussed FTSE 250 midcap index fell 0.5, although it was on track to eke out a weekly gain of 0.3.

Shares of NatWest tumbled 7.6 to reach the bottom of the index, after the British bank warned that rising interest rates may not deliver the longlasting earnings bonanza investors hope for.

The broader banking sector slipped 0.8.

UK markets were also taking cues from a gloomy global sentiment, triggered by U.S. data on Thursday that showed higher inflation and a drop in weekly jobless claims. The lacklustre data aided bets the U.S. Fed will stick to its aggressive tightening path.

We39;re back to that kind of market behaviour where good news is bad news, said Andrea Cicione, head of strategy at TS Lombard.

The market had shifted away from worrying about how high the terminal rate by the Fed would go, but the good data that39;s come out in recent weeks has shifted the emphasis back on the terminal rate.

Adding to central bankrelated gloom, Bank of England Chief Economist Huw Pill said the central…