* FTSE 100 up 0.6 pct, mid-caps up 1.3 percent at close
* Grocers drop after Amazon deal
* Tesco also under pressure after sales figures
* Industrials drive mid-caps (Recasts, adds quote and details, updates prices at close)
By Helen Reid and Kit Rees
LONDON, June 16 (Reuters) - Strength in financials and energy firms supported the FTSE on Friday but the index posted its widest weekly loss in two months after a week of political uncertainty and jitters about the resilience of the consumer engine of the UK economy.
British stocks sold off on Thursday as fears grew around the squeezed British consumer and the durability of stronger macroeconomic data which had spurred cyclical sectors higher.
The main FTSE 100 benchmark was up 0.6 percent at 7,463.54 points at its close, while UK mid-caps pulled out of Thursday's nosedive to gain claw back 1.3 percent.
Competition worries added to the woes of British retailers, in particular grocers, which sold off after news that U.S. giant Amazon was to buy U.S. organic supermarket chain Whole Foods.
Shares in supermarket retailers Tesco, Sainsbury and Marks & Spencer all fell between 1.9 percent to almost 5 percent, while Morrison gained 1.1 percent.
The latter was seen as somewhat protected against any Amazon incursion.
This exacerbated the move in Tesco's shares, which had reversed course after weak international same store sales overshadowed the retailer's strongest UK sales growth in seven years.
Much of the focus this week was on the more domestically exposed mid-cap companies, with concerns coming to a boiling point on Thursday when furniture store DFS warned on profit, triggering a sharp sell-off among consumer-exposed stocks.
Investors said valuations among mid-caps, which hit a fresh record high as recently as two weeks ago, were also putting off prospective buyers.
"It's not panic stations, but you can see why there might be a consolidation," said Ian Williams, head of economics and strategy at Peel Hunt.
"Mid-caps have held up a lot better than people thought they would. So although underlying earnings are good and the bottom up news is good, valuations mean there's not that many more compelling cheap opportunities," he added.
Uncertainty around UK politics, a week after a shock general election result, had also generated jitters around domestic stocks.
Among sectors, energy stocks lent some support after oil edged up off its seven-week lows, while wealth manager St James's Place, paper firm Mondi and support services firm DCC were the top FTSE gainers.
Driving the mid-cap recovery were industrials firms with less exposure to the domestic economy, with engineer Cobham the biggest gainer. (Editing by Jeremy Gaunt.)