British equities mixed as markets mull US-UK trade deal

By Sanchayaita Roy, Ragini Mathur and Twesha Dikshit

May 8 (Reuters) - British blue-chips closed lower on Thursday, while midcaps clocked gains as investors weighed up a trade deal between the United States and Britain, the latest in a saga of global trade developments.

The United States and Britain announced a "breakthrough deal" on trade, where London agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to U.S. goods as part of the agreement, while a 10% baseline tariff on UK goods imported into the U.S. remains in place.

Additionally, the British government said the deal will reduce tariffs on some British-made cars from 27.5% to 10% and the 25% tariffs currently imposed on British steel exports to the U.S. will be reduced to zero.

"For the UK this deal appears to be ultimately favourable for some of its largest exports, specifically cars, auto parts and aerospace engines to name some of the key areas", said Lindsay James, investment strategist at Quilter.

The midcap FTSE 250 .FTMC gained 0.6%, posting its highest close in more than two months, while the FTSE 100 .FTSE fell 0.3%.

Shares of luxury car company Aston Martin AML.L climbed close to 14%, among the top gainers on the midcap index.

Rolls-Royce RR.L closed 3.7% higher after U.S. Commerce Secretary Howard Lutnick said they will allow engines and plane parts from the jet engine maker to come in the U.S. tariff-free.

The broader Aerospace and Defence .FTNMX502010 subindex climbed 2.5%.

Earlier in the day, the Bank of England (BoE) cut interest rates as expected, although the uncertain impact of tariffs on economic growth brought a surprise three-way split among policymakers.

Among other stocks, IMI IMI.L emerged as the top performer in the blue-chip index, gaining 5.1%, after the specialist engineering company reaffirmed the financial year 2025 outlook.

Renishaw RSW.L soared 18.6% to the top of the midcap index after the engineering firm decided to shut loss-making drug delivery unit.

For related prices, Reuters users may click on -  UK stock report     .L     FTSE index:         0#.FTS6  techMARK 100 index: .FTT1X         FTSE futures:     0#FFI:  Gilt futures:       0#FLG:         Smallcap index:    .FTSC  FTSE 250 index:     .FTMC          FTSE 350 index:    .FTLC  Market digest:      .AD.L          Top 10 by vol:     .AV.L  Top price gainers:  .NG.L          Top % gainers:     .PG.L  Top price losers:   .NL.L          Top % losers:      .PL.L 
     For related news, click on - UK hot stocks:      HOT and GB     Wall Street:          .N Gilts report:       GB/            Euro bond report GVD/EUR Pan European stock report: .EU Tokyo stocks:       .T             HK stocks:           .HK Sterling report:    GBP/           Dollar report:      USD/
     For company prices, click on - Company directory:  UKEQ          By sector:          FTAX 
     For pan-European market data, click on - European Equities speed guide................ EUR/EQUITY  FTSE Eurotop 300 index........................... .FTEU3  DJ STOXX index................................... .STOXX  Top 10 STOXX sectors........................ .PGL.STOXXS  Top 10 EUROSTOXX sectors................... .PGL.STOXXES  Top 10 Eurotop 300 sectors.................. .PGL.FTEU3S  Top 25 European pct gainers.................... .PG.PEUR  Top 25 European pct losers..................... .PL.PEUR