By Shashwat Awasthi
(Reuters) - Britain's FTSE 100 slipped to a seven-week low as China slapped retaliatory tariffs on U.S. goods, further escalating their protracted trade dispute, and as telecom giant Vodafone slipped after a report of a dividend cut.
The FTSE 100 ended down 0.6% while the FTSE 250 tumbled 1.2% on Monday, led by a slump in Metro Bank.
"Make no mistake this is a serious escalation and we have a trade war on our hands again. The breakdown last week has not proved temporary and it seems China is prepared to go toe-to-toe with the U.S. on this," markets.com analyst Neil Wilson said.
Beijing said it would impose higher tariffs on most U.S. imports on a revised $60 billion target list, striking back at a tariff hike by Washington and easing investor appetite for risky assets.
The latest twist in the long-standing dispute hurt Asia-exposed stocks once again. Financial heavyweights were among the biggest drags on the main bourse, while an index of miners skidded to its lowest in almost three-and-a-half months.
"Traders don't think things will get much better yet, but this may be overly pessimistic," Wilson said.
Vodafone tumbled 5.2% on its worst day in nearly five years after The Times reported that the world's second-biggest mobile operator was set to slash dividends to pay for auctions for mobile phone airwaves in Germany and Italy.
Brexit worries also weighed on sentiment, amid a lack of clarity over where cross-party talks were headed and growing calls for Prime Minister Theresa May's departure.
UK-focused banks and industrial groups traded in the red on both indexes.
ITV slipped 6.3% to be the worst performer on the FTSE 100. The broadcaster said The Jeremy Kyle Show, one of Britain's best-known daytime television programmes, was taken off-air indefinitely after a guest died a week after appearing on the talk show.
But a notable blue-chip gainer was British Gas owner Centrica, which added 3% after maintaining its annual operating cash flow and net debt forecast and as defensive stocks were in demand.
Metro Bank, which has lost more than two-thirds of its value this year, fell 11% to hit another all-time low on the mid-cap index.
It said on Friday its plan to raise equity was well advanced, while a Financial Times report on Sunday said it was looking to sell loans that were hit by an accounting error.
(Graphic: Vodafone & BT underperform FTSE 100 in 2019, https://tmsnrt.rs/2LFjk6H)
(Reporting by Shashwat Awasthi and Muvija M in Bengaluru; editing by Jon Boyle and Ed Osmond)