UPDATE 1-UK's FTSE 100 flat as financials gain and consumer staples, mining stocks slide

The UK's FTSE 100 ended flat on Tuesday as financial stocks rose after the Bank of England eased capital requirements for lenders in a bid to boost growth, while consumer staples and mining shares declined. The blue-chip FTSE 100 closed flat, while midcap FTSE 250 dipped 0.2%.

The UK's FTSE 100 ended flat on Tuesday as financial stocks rose after the Bank of England eased capital requirements for lenders in a bid to boost growth, while consumer staples and mining shares declined.

The blue-chip FTSE 100 closed flat, while midcap FTSE 250 dipped 0.2%. The broader banks index climbed 1.2% as Britain's central bank cut the amount of capital it estimates lenders need to hold for the first time since the global financial crisis.

Shares of Lloyds Banking Group gained 1.9%, while Barclays added 1.6%. The BoE also said that threats to Britain's financial system had risen this year due to stretched valuations of companies investing in AI, risky lending and bets with borrowed money in government bond markets.

Aerospace and defence shares gained 0.8%. Rolls-Royce and BAE Systems rose about 0.9% each. Russian President Vladimir Putin warned Europe that it would face swift defeat if it went to war with Russia, and dismissed European proposals on Ukraine before he met two of U.S. President Donald Trump's most powerful envoys.

Meanwhile, the OECD said Britain's economy would grow faster than previously expected next year, citing the impact of finance minister Rachel Reeves' budget on consumption and drag from global uncertainty that could keep pressure on inflation. Last week Reeves' long-awaited budget soothed some concerns about Britain's long-term finances.

Investors in global markets are awaiting a decision from the U.S. Federal Reserve on interest rates next week, with markets expecting a 25-basis-point rate cut. The BoE is expected to deliver a similar-sized move later in the month. Precious metal miners slid 3.8% after gold prices declined. Fresnillo fell 3.3%, while Endeavour Mining lost 4.9%.

Industrial metal miners dipped 1.1% as copper prices fell. Anglo American lost 1.3%. Home builders fell 0.7%, with Barratt Redrow down 1.7% and Berkeley Group falling 3.2% after RBC downgraded both stocks.

Consumer staples such as Diageo, Unilever, and Marks & Spencer also fell between 1.3% and 2.1%.

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