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* Indivior top mid-cap gainer
* Rolls-Royce tumbles on lower engine travel expectations
* UK's unemployment rate jumps to highest since 2016
* FTSE 100 rises 0.2%, FTSE 250 adds 0.5%
(Updates to close)
By Shashank Nayar and Amal S
Jan 26 (Reuters) - British stocks ended higher on Tuesday
after drugmaker AstraZeneca denied reports that its COVID-19
vaccine was less effective in the elderly population, while
Indivior surged after its former parent withdrew a $1.4 billion
legal claim.
The blue-chip FTSE 100 index climbed 0.2%, with
automakers and healthcare stocks
leading the gains, while the mid-cap index rose 0.5%.
However, weakness in general retailers limited
gains after British retail sales suffered their biggest annual
drop since May this month, suggesting the latest lockdown is
taking a heavy toll on many shops.
The mood was also dampened by a jump in Britain's
unemployment rate to 5.0%, its highest in nearly five years, in
the three months to November.
"Even though the unemployment rate is at 5%, it was meant to
go to 5.1%. So, there were positive angles to pick among the
negative news and I think that seems to have benefited
sentiment alongside the pound falling," said Connor Campbell, a
financial analyst at SpreadEx.
Drugmaker AstraZeneca gained 0.7% and gave the
second biggest boost to the blue-chip index after it denied
reports its COVID-19 vaccine was not very effective for people
over 65.
The FTSE 100 has recorded consistent monthly gains since
November on expectations of a vaccine-led recovery, but it has
lost steam as extended lockdowns hit business activity.
The International Monetary Fund cut Britain's growth outlook
for 2021 because of a resurgence in novel coronavirus cases, and
forecast it would take until next year for the economy to regain
its pre-pandemic strength.
Britain's Rolls-Royce dropped 1.8% after it
downgraded expectations for how much its engines would fly this
year.
Indivior leapt 13.1% to the top of the FTSE 250
index after it said late on Monday that former parent Reckitt
Benckiser would withdraw a $1.4 billion claim against the
company.
(Reporting by Shashank Nayar in Bengaluru; editing by
Uttaresh.V and Subhranshu Sahu and Barbara Lewis)
