UPDATE 2-UK stocks close the week lower as Brexit woes add to economic fears
* Homebuilder Persimmon tops FTSE 100 for the week
* Retail stocks gain as retail sales better than expected
* FTSE 100 down 1.4% for the week, FTMC down 0.9% (Updates to close)
By Muvija M and Ambar Warrick
Aug 21 (Reuters) - The British bluechip index ended lower on Friday and broader stocks lost for the week amid new concern over whether Britain could avoid a hard exit from the European Union by the year-end.
The FTSE 100 index .FTSE closed 0.2% lower and shed 1.4% over the week, while the FTSE 250 index .FTMC inched higher for the day and lost 0.9% for the week.
Britain and the European Union made scant progress towards a deal on future ties in talks this week, and their chief negotiators blamed each other for the stalemate. over a hard brexit bought in a new layer of anxiety for markets already reeling from the impact of the coronavirus.
British stocks have underperformed several of their global peers this year, with doubts over a recovery intensifying after the country's economy contracted by a record 20% in the second quarter.
"It feels like the market is gradually coming to the realisation that the world is going to have to live with COVID-19 for longer as countries which have emerged from lockdown experience localised flare-ups and a general increase in infections," Russ Mould, investment director at AJ Bell wrote in a note.
Consumer discretionary stocks were among the few gainers for the day after data showed British retail sales surged past their pre-coronavirus level last month, although concerns persisted over debt levels in the country. Capital HGT.L rose 8.8% after announcing further investment in software firms Visma and Sovos.
Oil and gas heavyweight BP PLC BP.L was one of the worst weekly performers on the FTSE 100, pressured by weakness in oil prices through the week.
Homebuilder Persimmon PSN.L outperformed its blue-chip peers for the week with a more than 5% gain after it said it would reinstate its dividend, making it one of the first UK-listed companies to bring back a dividend after the initial shock of the pandemic. Weekly percentage gainers and losers on the FTSE 100
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