London stocks slide as BoE sees slower rebound, Glencore tumbles

London-listed shares fell on Thursday as the Bank of England forecast a slower-than-expected rebound from the COVID-19 pandemic, while Glencore tumbled after scrapping its dividend to pay down debt.

The mining group slipped 4pc as it also booked a $3.2 billion impairment charge, driving the FTSE 100 down 1.2pc after three straight sessions of gains.

ITV, Britain's biggest free-to-air commercial broadcaster, was also among the biggest decliners on the blue-chip index after it posted a 50pc drop in first-half adjusted earnings.

The mid-cap FTSE 250 was down 0.8pc, with industrial, real estate and financial stocks among the biggest drags.

"The outlook for the UK economy is not great but having underperformed both Europe and US markets for a very long time, UK equities are poised for some catch-up in the coming months," said Simona Gambarini, markets economist at Capital Economics in London.

Despite a stimulus-led rally since April, the FTSE 100 is still down about 20pc this year while the S&P 500 is up 3pc, and surging COVID-19 cases have raised the spectre of further lockdowns and threatened a nascent business recovery.

The Bank of England said on Thursday the British economy would not recover to its pre-pandemic size until the end of next year, later than its earlier estimate of a recovery by the second half of 2021.

British Housing Secretary Robert Jenrick said new housing starts could be down as much as 40pc this year even with the industry showing signs of a rebound from its pandemic lows.

In earnings-driven moves, outsourcer Serco slumped 12.5pc even as it reported a jump in first-half profit, while insurer Phoenix Group Holdings Plc jumped 2.7pc on raising its 2020, cash generation target.

Aero, mining and personal goods stocks were among the biggest decliners on the day.