By Alistair Smout
LONDON (Reuters) - Britain's top share index edged lower on Friday and looked headed for its biggest weekly fall so far this year after a drop in utility stocks compounded weakness in commodity-related shares.
Utility stocks were some of the worst performers, with British Gas owner Centrica (L:CNA) the top faller, down 2 percent and SSE (L:SSE) down 1.3 percent.
Opposition Labour Party leader Ed Miliband will reiterate his plans to empower the energy regulator to force utility companies to cut bills in line with falling energy prices if he wins May's general election, according to British media.
Both Centrica and SSE have been laggards since the start of the year on concerns that they will become subject to greater regulation and price caps, in one of the first signs of election-related stress in the markets.
"Utilities are down on the back of Ed Miliband's comments again that energy regulators should have bigger teeth to bite into energy providers," said Alastair McCaig, IG market analyst.
"There hasn't been a lot of focus on May's general election in financial markets so far this year, but utilities have seen the effects. Attention will shift to the vote from here."
Britain's FTSE 100 (FTSE) edged down 0.97 points to 6,760.10 by 0900 GMT and was down 2.2 percent this week, its biggest weekly drop since December.
It has been hit by weakness in commodity and energy stocks and has missed out on the uplift seen in euro zone shares from a drop in the euro
The euro is set for a record quarterly fall, dropping as the European Central Bank launched its bond-buying programme. At the same time, a strong greenback has hit dollar-denominated assets such as oil and copper.
While better data from China has helped copper recover, oil remained under pressure and oil groups BG (L:BG), BP (L:BP) and Royal Dutch Shell (L:RDSa) all fell on Friday.
Outside the blue chips, Afren (L:AFRE) dropped 18 percent after a rescue plan was agreed for the indebted oil producer, which will lead to equity dilution.
Beyond energy stocks, broker rating changes drove many of the top movers.
Diageo (L:DGE) dropped 1.7 percent after Credit Suisse (SIX:CSGN) cut the beverage firm to "underperform" from "neutral".
However, Whitbread (L:WTB) rose 2.6 percent, benefitting from upgrades by Deutsche Bank (XETRA:DBKGn) and UBS.
"Whitbread's consistent performance... lends a significant degree of confidence that the performance can be repeated," analysts at Deutsche Bank write in a note, lifting the stock to "buy" from "neutral" in anticipation of an update on growth milestones.
"Circumstances are unlikely to (be) as bad over the next five years as they have been for the last five."