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* UK economy grows by slower-than-expected 1.1% in Sept

* Britain has always worked hard to get EU deal - PM spokesman

* Legal and General slips on keeping 2020 dividend flat

* FTSE 100 down 0.7%, FTSE 250 falls 0.2%

Nov 12 (Reuters) - London's FTSE 100 slipped on Thursday after rallying more than 7% this week as slower-than-expected domestic economic growth in September underscored concerns about a faltering recovery from the coronavirus-driven recession.

The blue-chip FTSE 100 index closed down 0.7%, with engineering company Rolls-Royce Holdings Plc tumbling 8.6% as it raised 2 billion pounds from a rights issue after shareholders signed up for 94% of the new shares and the rest were sold via a rump placing.

Bank and energy stocks were among the biggest draggers after having surged more than 14% and 17% respectively this week.

After rising as much as 0.5% in afternoon trade, the domestically focused mid-cap FTSE 250 ended 0.2% lower as official data showed Britain's economy grew by a slower than expected 1.1% in September from August - even before the latest COVID-19 lockdown.

"It's going to continue to be a stuttered recovery until a vaccine is widely available and the next couple of months are going to be extremely challenging in managing the virus," said Craig Erlam, senior market analyst at Oanda.

UK markets, however, have sharply rebounded this month from a 5% fall in October as a slew of stimulus measures and positive vaccine data supported hopes for a sooner-than-expected economic rebound.

Britain recorded 33,470 new coronavirus cases on Thursday, with a Imperial College study saying English infections doubled in October ahead of the reintroduction of a national lockdown.

On the Brexit front, Britain has been working hard throughout the trade negotiations with the European Union to secure a deal, a spokesman for Prime Minister Boris Johnson said after the Irish prime minister commented that London needed to "knuckle down".

Luxury brand Burberry Group Plc reversed course to end 2.3% lower even after its sales returned to growth in October.

Insurer Legal & General Group Plc fell 1.9% after it kept its final dividend payment for 2020 flat.

Specialty chemicals maker Croda International slipped 2.8% after Barclays downgraded the stock to "underweight".

(Reporting by Devik Jain in Bengaluru; Editing by Devika Syamnath, Anil D'Silva and Mark Heinrich)