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UK shares fell on Friday as a sharp drop in retail sales and gloomy global economic outlooks from the World Bank and the International Monetary Fund fanned concerns about slowing growth as central banks prepare for more rate hikes.

The blue-chip FTSE 100 declined 0.4% at 0710 GMT, while the mid-cap FTSE 250 shed 0.8%, both on track to end the week lower.

Data showed retail sales fell much more than expected in August, in another sign that the British economy is sliding into recession as the cost of living crunch squeezes households' disposable spending.

Retailers slid 1.6%. UK fashion retailers ASOS and Primark-owner Associated British Foods and online supermarket Ocado Retail, a joint venture of Ocado Group and Marks & Spencer Group, have all warned about their profits this month.

Mining stocks declined 2.8%, leading losses on the commodity-heavy FTSE 100.

Broadly, Asian shares and Europe's STOXX 600 declined as investors braced for a hefty U.S. rate hike next week.

The Bank of England also looks set to hike borrowing costs by another 50 basis points next week, a Reuters poll found earlier this week. (Reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila; Editing by Sriraj Kalluvila)