The blue-chip FTSE 100 eased 0.2% to mark its fourth consecutive decline. Rentokil was the top drag on the index, down 12.3% to mark its worst day in 13 years.

The pest control firm said it is buying U.S. rival Terminix in a $6.7 billion deal, at a significant premium of 47%.

However stronger industrial miners and gains in banking shares on the back of firmer long-term yields helped limit losses.

The domestically focussed FTSE 250 index fell 0.4% after fears around fresh COVID-19 restrictions amid rising Omicron cases affected sentiment.

"Omicron has clearly added a huge cloud of uncertainty over the outlook for the economy in the coming months just as many countries were preparing for tighter monetary policy," said Craig Erlam, senior market analyst at Oanda.

British employers added a record number of staff in November, data showed ahead of the Bank of England's monetary policy decision on Thursday.

While positive, the data underscores the dilemma that the BoE faces after the fast-spreading Omicron coronavirus variant and renewed restrictions caused investors to pare back bets of a rate hike this week.

Among individual stocks, BT Group fell 4.3% after Franco-Israeli telecoms entrepreneur Patrick Drahi increased his stake to 18%, drawing a defensive response from the British government.

Online supermarket group Ocado Group jumped 5.5% to the top of the FTSE 100 on winning a patent infringement lawsuit against Norwegian robotics company AutoStore Holdings Ltd in the International Trade Commission.

British public transport group National Express rose 1.7% after saying it is acquiring rival StageCoach, up 10.5%, in an all-share deal.

(Reporting by Bansari Mayur Kamdar and Shashank Nayar in Bengaluru; Editing by Subhranshu Sahu, Amy Caren Daniel, William Maclean)

By Bansari Mayur Kamdar and Shashank Nayar