The blue-chip FTSE 100 shed 0.1%, with oil and gas major BP weighing the most after it forecast declining fossil fuel demand due to climate policies and the coronavirus epidemic. Oil prices were steady. [O/R]

The mid-cap index added 0.7%, with G4S surging to a near seven-month high after it rejected a 2.95 billion pound ($3.8 billion) offer from Canadian security firm GardaWorld, saying it was "highly opportunistic".

Divorce talks between the United Kingdom and the European Union continued to be at the forefront, with the bloc ramping up pressure on Prime Minister Boris Johnson to step back from breaking the Brexit divorce treaty.

"Brexit is back with a bang, and there's a growing risk that the transition period will end with no trade agreement in place between the UK and the EU," ING economists wrote in a note.

Markets are also awaiting Thursday's Bank of England policy meeting, where it is likely to signal more stimulus to lift the economy out of a deep recession that could be exacerbated by a messy Brexit.

While steady stimulus has helped the FTSE 100 bounce from its coronavirus lows earlier this year, surging cases and middling economic data have seen the index stall in recent months, with new Brexit fears also expected to weigh in the near-term.

Drugmaker AstraZeneca fell slightly, despite resuming British clinical trials of its COVID-19 vaccine, which is one of the most advanced in development.

British recruiting firm SThree Plc rose 1.4% as it said its underlying sequential performance had been improving since the first half of the year.

By Shashank Nayar and Ambar Warrick