UK stocks decline as global rally stalls

British equities slipped in early trade on Thursday as a recent global rally supported by hopes of interest rate cuts from major central banks next year came to an abrupt halt, with Wall Street indexes closing sharply lower overnight.

Dec 21 (Reuters) - By 0806 GMT, the blue-chip FTSE 100 fell 0.3%, while more domestically-focussed FTSE 250 midcap index lost 0.6%.

Both indexes are on track to snap a three-day wining streak after UK stocks outperformed their European peers in the previous session following a surprise drop in domestic inflation.

Global markets have rallied since last week when the U.S. Federal Reserve hinted it could look at rate cuts next year. All three major U.S. stock indexes closed down over 1% on Wednesday.

Personal goods and construction and materials were amongst the top sectoral laggards, down over 1% each.

Shares in British American Tobacco, Halma and United Utilities Group fell between 0.6% and 2.4% as their shares traded without the entitlement for dividend. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Varun H K)