European shares post first weekly loss in four as banks weigh

European shares closed lower on Friday, hitting their lowest in over two weeks, weighed down by British banks, while investors assessed economic data in the U.S. and the euro zone.

Natwest dropped 4.8%, while Barclays  and Lloyds  shed 2.2% and 3.4%, respectively, as a think tank recommended Britain's government should tax banks on the billions of pounds they receive in interest from the Bank of England on the reserves they hold at the central bank.

This weighed on the broader banks index, down 0.9%. The index logged its sixth session of declines, its longest losing streak since October 2023.

The pan-European STOXX 600  closed 0.6% lower, registering its first weekly loss in four, with questions over the independence of the U.S. Federal Reserve and political uncertainty in France weighing on the index. However, it rose for the second consecutive month.