LONDON — Britain's benchmark FTSE 100 index fell 1.25% to 10,681.30 on Friday, down 134.84 points, giving back a substantial portion of the previous session's sharp rally as renewed concerns over instability in the Middle East and the Bank of England's future interest rate path weighed on investor sentiment.

Friday's decline followed a strong session Thursday, when the FTSE 100 closed 1.2% higher at 10,816.14 after the Bank of England kept its benchmark interest rate unchanged and announced it would pause gilt sales for six months while halting sales of long-dated gilts entirely. That combination of measures pushed long-dated gilt yields sharply lower, fueling a rally that analysts described as carrying genuine macroeconomic support rather than reflecting purely technical trading factors.

The rally proved short-lived. The index opened Friday roughly 0.3% lower at 10,785 before losses deepened through the session, ultimately dragging the FTSE 100 down by more than 1% by the time markets closed for the week. The reversal came even as several underlying economic indicators pointed in a more encouraging direction. UK retail sales volumes rose 0.5% on a month-over-month basis in August, comfortably beating economist forecasts for a 0.2% decline, and were up 2.4% compared with a year earlier, following a 0.5% annual decline in July. Oil prices also fell sharply, with Brent crude........

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