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FTSE 100 flat, FTSE 250 falls 0.7%

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Homebuilding stocks lead sectoral declines

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MJ Gleeson slumps after warning of lower profit

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Moonpig falls after brokerage downgrade

(Updates prices)

July 4(Reuters) -

London's main stock indexes closed mixed on Friday, with

investors assessing domestic fiscal worries and the rate cut

path, while weak global investor sentiment persisted ahead of a

U.S. tariff deadline.

The blue-chip FTSE 100 was unchanged on the day

but notched up a second weekly gain, while the

domestically-focussed FTSE 250 lost 0.7% on Friday and

ended the week lower.

The midcap index had logging its largest quarterly gain in

more than four years by the close of trade on Monday, but then

came under pressure as U-turns on welfare reforms blew a hole in

Finance Minister Rachel Reeves' budget plans.

The reform bill passed on Tuesday, but with limited

cost-reduction measures from the initially expected 5 billion

pounds ($6.83 billion) in savings, leading to concerns of

raised taxes or spending cuts elsewhere.

S&P Global said the inability to make modest cuts to welfare

spending showed the government's "limited budgetary room for

manoeuvre".

Homebuilder stocks led sectoral losses on

Friday, dropping 2.1% after MJ Gleeson warned of profit

being at the lower end of market expectations for fiscal 2026

due to subdued demand.

The group slumped 6.7% and was the top decliner on the

smallcap index.

Larger peers Vistry, Persimmon and Taylor

Wimpey fell 2.8%, 1.3% and 1.6%, respectively.

Industrial metal stocks fell, tracking lower

metal prices. Anglo American, Antofagasta ( ANFGF ) and

Glencore ( GLCNF ) slipped more than 1% each. Atalya

lost 3%.

The Bank of England's Alan Taylor said on Friday that

cutting interest rates now would be better than waiting and

risking cutting them later in a hurry. Traders are currently

pricing in an 80% chance of a rate cut in August, according to

LSEG data.

Data from S&P's UK construction PMI showed Britain's

construction industry downturn reduced in June with homebuilding

growth, but commercial building tumbled due to economic worries.

Elsewhere, global markets were subdued after U.S. President

Donald Trump said Washington will start sending letters with

tariff rates to countries on Friday.

Britain remains one of the only countries to have got a deal

with the U.S.

Among individual stocks, greeting card and gifting retailer

Moonpig fell 8.7% to the bottom of the midcap index

after a rating downgrade by Deutsche Bank.

($1 = 0.7323 pounds)