New data also showed that the country’s economy returned to growth in August after contracting in July. It grew 0.4% month-on-month in August, according to the Office for National Statistics
Another factor that dampened the mood is the IMF saying it is growing more concerned about entrenched inflationary pressures.
The mood is changing across markets: for the first time since June, Covid-19 is no longer perceived to be the biggest risk to markets, according to Deutsche Bank's latest monthly survey. It is now higher inflation and bond yields.
Today marks the start of the U.S. corporate earnings season, with JPMorgan publishing its results. U.S. inflation data are due at 1230 GMT and the Fed's minutes are at 1800 GMT.
Among stocks, Barratt Developments PLC rose 2.5% after its sales reached higher levels that before the pandemic started. Just Eat Takeaway shares dropped 4.3% on worse-than-expected third-quarter orders.
Things to read:
An empire of dying wells (Bloomberg)
China becomes next big prize for quant funds (Financial Times)