The blue-chip index slipped 0.1%, while the domestically focused mid-cap FTSE 250 index declined 1.1%, recording its worst session in nearly two-months.
Losses in the blue-chip index, however, were limited by decent gains by heavyweight oil majors BP, Royal Dutch Shell and life insurers.
Consumer prices last month rose by 3.2% in annual terms, the biggest monthly jump in at least 24 years, largely due to a one-off boost reflecting the "Eat Out to Help Out" scheme that pushed down restaurant meal prices last year.
The data came on the heels of a strong jobs report, with the focus now shifting to BoE's policy meeting due next week as policymakers remain split on whether basic conditions for a rate hike are met by the economy.
"We're probably going to see a lot more inflation jitters now for the next few months especially if central bankers are going to persevere, or really talk persevering with removing stimulus, because that's just going to add fuel to the inflation fire," said Craig Erlam, senior market analyst at Oanda.
"If the economic recovery is slowing and COVID cases reviving, maybe more restrictions going into the winter, and yet central banks are raising interest rates that would suggest that the previous statements on the transitory nature of inflation are not necessarily the belief."
A Reuters poll forecasts the BoE will raise borrowing costs by end-2022, earlier than previously thought, and there is a chance it comes even sooner.
Food delivery company Just Eat Takeaway.com dropped 4.5% to the bottom of the index following a media report that Amazon and rival Deliveroo will offer free delivery to prime subscribers in Britain.
Among other stocks, Darktrace jumped 14.5% after the cybersecurity company increased its revenue growth forecast for its 2022 financial year.
Tullow Oil added 5.4% after the Africa-focused oil and gas company swung to a profit in the first half.
(Reporting by Devik Jain and Amal S in Bengaluru; Editing by Sherry Jacob-Phillips and Emelia Sithole-Matarise)
By Devik Jain and Amal S