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Dec 22 Reuters British equities edged lower on Friday as a dour GDP reading brought forward recessionary jitters, while investors braced for the latest U.S. inflation data due later in the day.

The bluechip FTSE 100 slipped 0.1 as of 0901 GMT, and FTSE 250 midcap index fell 0.3.

However, the indexes are set to extend gains to a fourth and third week, respectively, as global markets rallied on the Federal Reserve39;s dovish pivot while a surprise drop in domestic inflation boosted UK equities.

Britain39;s economy might now be in a recession according to data which showed output shrank in the JulytoSeptember period.

Some of the UK39;s biggest stocks rely on consumers spending on nonessentials, which makes this development a tough one, said Sophie LundYates, lead equity analyst at Hargreaves Lansdown.

The contraction in the economy increases the chances of an official recession coming down the pipes in the new year, but a lot will rest on just how much of a merry Christmas we39;ve had.

A separate reading showed British retail sales volumes rose by 1.3 in November compared with the month before.

The November U.S. Personal Consumption Expenditure PCE index, the Fed39;s preferred inflation gauge due later in the day, would be on investors39; radar.

Retailers were amongst top decliners, down 1.2, while energy stocks added 0.5 tracking rising crude oil…