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* UK shoppers boost spending again in May

* UK economy stumbles, but price pressures remain high

* GSK rises on settlement in U.S. Zantac litigation

* FTSE 100 down 0.5%, FTSE 250 off 1.5%

June 23 (Reuters) - British equities slipped on Friday with homebuilders leading declines, rounding off a week filled with losses after the Bank of England's bumper rate hike, while drugmaker GSK jumped after reaching a settlement in its heartburn drug litigation.

The benchmark FTSE 100 fell 0.5%, while the FTSE 250 mid-cap index lost 1.5% for the day.

Both indexes logged steep weekly declines, with the FTSE 100 posting its worst weekly performance since the U.S. banking turmoil in March, while the FTSE 250 recorded its worst weekly showing in over a year.

Rate-sensitive homebuilders were the top losers this week after the BoE raised its bank rate by an unexpected 50-basis points on Thursday in its bid to curtail runaway inflation.

Persimmon, which is part of the blue-chip FTSE 100, dropped 4% after HSBC downgraded the homebuilder's rating to "hold" from "buy", while the broader index was down 2.9%.

"The reason why interest rate hikes tend to bite quicker in the UK is because the terms of mortgage rates reset much more quickly," said Steve Sosnick, chief strategist at Interactive Brokers.

The rain of economic indicators continued, with data showing Britain's retail sales unexpectedly rose in May, while the services sector showed signs of a slowdown this month.

Another set of data revealed British

consumer sentiment

hit its highest level since January 2022.

A hawkish U.S. Federal Reserve and rate hikes by major central banks this week continued to bruise sentiment.

In a bright spot, GSK jumped 4.9% after the drugmaker reached a litigation settlement in the U.S. over its heartburn drug Zantac.

Industrial metal miners were amongst the biggest weighs, down 2.8% as copper prices slipped.

Meanwhile, British banks agreed to give homeowners who miss mortgage payments a year of grace before foreclosing, as the government sought to ease the strain of rising interest rates.

The banks index fell 1% at close. (Reporting by Ankika Biswas, Khushi Singh and Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob-Phillips and Mark Heinrich)