The FTSE 100 fell by 0.9 percent as sterling climbed to a 10-week high, effectively bringing down the value of the U.S. revenues of blue-chip exporters. Sterling's rise followed news that Britain's Labour Party will back an attempt by lawmakers to prevent a disorderly no-deal Brexit.

Though the more domestically exposed mid-cap index <.FTMC> tends to be buoyed by a stronger pound, the index shed 0.5 percent as a string of weak trading updates dominated sentiment.

The declines put both UK indexes on course for their first weekly losses in 2019.

Oil majors BP and Shell tumbled as crude prices flirted with negative territory in choppy trading. [O/R]

Multinationals Reckitt Benckiser, British American Tobacco and GlaxoSmithKline also fell as the pound firmed.

Concern over a prolonged Sino-U.S trade dispute rose again after the Financial Times reported that the Trump administration had rejected an offer from China for talks ahead of high-level negotiations next week. White House adviser Larry Ludlow denied the report, but the damage to sentiment was done.

Further marring the mood were soft U.S. home sales data, a bigger than expected fall in Japanese exports in December and weak factory sales in Canada - pointing to tough trading conditions across the globe.

Luxury brand Burberry, meanwhile, erased early losses to add 2.9 percent despite weak Christmas sales data. Investors took comfort in what CMC Markets analyst David Madden called "a respectable performance" in mainland China.

High-end retailers across Europe have been hit by worries that the Sino-U.S. trade war could hit Chinese demand.

Uncertainties over Britain's exit from the European Union persisted. As the March 29 deadline approaches, hopes are growing that British lawmakers will prevent a no-deal departure though no sign of an agreement has yet emerged.

The EU's Brexit negotiator Michel Barnier said that a no-deal Brexit was the default scenario and opposition from the House of Commons would not prevent it from happening.

Mid-cap Metro Bank tanked nearly 40 percent, knocking more than 800 million pounds off its market value, after it announced a sharp rise in exposure to higher-risk mortgages and said profits would be hit by slowing growth.

Sanne Group, which provides alternative asset and corporate administration services, tumbled more than 17 percent - its steepest intra-day fall on record - after announcing the departure of its chief executive and a trading update.

Computacenter, however, jumped 10.6 percent after an upbeat trading update showing higher IT spending in Germany and the United Kingdom.

Europe's biggest plastics packaging maker RPC rose 4.4 percent after Apollo Global agreed to buy the company for 3.3 billion pounds.

(Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Mark Potter and David Goodman)

By Muvija M and Shashwat Awasthi