UPDATE 2-Tariff threats, global growth jitters trip up Britain's main index

Britain's FTSE 100 lost ground as the U.S. and European Union exchanged tariff threats, the IMF cut global growth forecasts and oil majors slipped after Russia signalled an output boost, while investors awaited fresh Brexit updates. The main bourse ended 0.4 percent lower, despite touching a six-month high earlier on the back of strength in financial stocks. The FTSE 250 slid by the same amount.

U.S. President Donald Trump said he would impose retaliatory tariffs on $11 billion worth of EU products for damage the United States says has been done by EU subsidies to Airbus . This prompted a European Commission source to say the EU was preparing for possible countermove over subsidies for Boeing . "Whilst at present it looks like a relatively contained problem relating to the ruling on Airbus subsidies, there is a risk of contagion if the EU decides to respond in kind," Markets.com analyst Neil Wilson said.

Adding to woes, the IMF cut its global economic growth forecasts for 2019 and said growth could slow further due to trade tensions and Britain's potentially disorderly exit from the EU. Shell and BP were the biggest drags on the main index as oil prices slipped after comments from Russia signalled the possible easing of a supply-cutting deal with OPEC.

Also tugging the FTSE 100 lower were industrials that fell on the tariff threats. Melrose gave up 2.3 percent, while Rolls-Royce lost 1.3 percent. On the Brexit front, France dampened the mood by laying down blunt conditions for another delay to Britain's exit from the bloc ahead of May's meeting with French President Emmanuel Macron.

Blue-chip housebuilders, generally considered more vulnerable to Brexit jitters, were hit by the lingering uncertainty and fell between 1.5-2.4 percent. But WPP added 2.1 percent after the Telegraph reported https://www.telegraph.co.uk/business/2019/04/08/swedens-wallenberg-family-eyes-35bn-bid-kantar that buyout firm EQT was considering a bid for Kantar, the data analytics unit of the world's biggest advertising group.

Reuters reported last month that a number of buyout funds including Advent and Blackstone were in talks with WPP on bids for a majority stake in Kantar. Water utility Severn Trent shed 1.6 percent and its mid-cap peer Pennon slipped 0.8 percent after JP Morgan downgraded the stocks.

The brokerage said the threat of nationalization of UK utilities was rising as the Brexit impasse may lead to a national election. The opposition Labour Party has proposed nationalising various businesses, including utilities. (Reporting by Yadarisa Shabong and Muvija M in Bengaluru; Editing by Alison Williams)