London stocks slip as markets stay wary of global rate outlook

(Reuters) - British equities ended lower on Monday, as investors shied away from risky assets after last week's U.S. jobs report reinforced views that the Federal Reserve would be cautious about cutting interest rates this year.

The blue-chip FTSE 100 dipped 0.3%, while the domestically focussed FTSE 250 midcap index slipped 0.1%.

Global stocks fell, while bond yields remained elevated after data on Friday showed U.S. job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1%.

U.S. government bond yields touched multi-month highs with traders pricing in just one rate cut from the Fed this year.

British bonds have been at the heart of a recent global bond market selloff, with a sharp rise in borrowing costs fuelling concerns about Britain's fiscal sustainability. The yield on the 30-year gilt jumped to a fresh 27-year high, while the yield on the 10-year note stood at its highest since 2008.

British midcaps suffered a near 3% drop last week on worries about the UK's growth coming under pressure from higher taxes and stalled spending.

Inflation figures on both sides of the Atlantic as well as UK quarterly GDP estimates will be in focus later this week.

The energy sector was an outlier, up 1.4% as crude prices gained on expectations that wider U.S. sanctions on Russian oil would force buyers in India and China to seek other suppliers. [O/R]

Higher crude oil prices weighed on airline stocks, with British Airways-owner IAG, Wizz Air and easyJet down between 2.2% and 3.6%.

Biotech firm Oxford Nanopore Technologies jumped 8.9% after forecasting full -year revenue of about 183 million pounds ($222.27 million) vs. 169.7 million a year prior.

PageGroup dipped 3.2% after the recruiter issued its second profit warning in six months.

(Reporting by Shashwat Chauhan and Sruthi Shankar in Bengaluru; Editing by Tasim Zahid and Christina Fincher)