FTSE 100 falls on weaker banks, miners; Virgin Money UK jumps

The FTSE 100 is headed for modest weekly losses, the third week in a row as uncertainty over interest rate cuts loom, and as markets digest the government's pre-election budget, which offered few surprises and tax measures that were widely expected. "The reality appears to be sinking in that although the cuts to National Insurance may fire up some discretionary spending power, the fiscal drag of freezing income tax thresholds will counter the effect," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

The UK's FTSE 100 slipped on Thursday, dragged by financial and mining stocks, while shares of Virgin Money UK soared on a potential buyout offer.

The blue-chip FTSE 100 was down 0.3% as of 0906 GMT, while the midcap FTSE 250 edged up 0.2%. Banks declined 2.1% and weighed the most on the index, dragged by HSBC Holdings and Standard Chartered, while base metal miners shed 0.5%, bogged down by a fall in Rio Tinto as they traded ex-dividend.

Among earnings, Entain dropped 5.3% after the gambling group said that some regulatory measures in the UK and the Netherlands would hurt its profit forecast for the current financial year, while aerospace supplier Melrose fell 4.1% on flagging revenue headwinds. The FTSE 100 is headed for modest weekly losses, the third week in a row as uncertainty over interest rate cuts loom, and as markets digest the government's pre-election budget, which offered few surprises and tax measures that were widely expected.

"The reality appears to be sinking in that although the cuts to National Insurance may fire up some discretionary spending power, the fiscal drag of freezing income tax thresholds will counter the effect," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. Virgin Money UK jumped 36.1% after Nationwide Building Society agreed to potentially buy the lender in a deal valued at about 2.9 billion pounds ($3.69 billion).

Rentokil Initial surged 12.2% after the pest control firm reported a 50% jump in annual profit. Investors will also focus on the European Central Bank's interest rate decision later in the day, where it is largely expected to keep its policy rates unchanged.

Separately, British house prices rose for a fifth month in a row in February according to data from mortgage lender Halifax that echoed other signs of a recovery in the housing market.