After falling as much 1.3%, the blue-chip FTSE 100 index ended down 0.4%, with mining stocks, including Rio Tinto, Anglo American, Glencore and BHP among the biggest weights.

Rio Tinto and BHP were trading ex-dividend.

"Inflation is a dog that hasn't barked despite huge monetary stimulus over the last 12 years, and the fears we're seeing in the market today could well fizzle out before raising government bond yields much higher," said Laith Khalaf, financial analyst at AJ Bell.

Resurgent worries about rising U.S. bond yields hit global shares as investors waited to see if Federal Reserve Chair Jerome Powell will address concerns about the risk of a rapid rise in long-term borrowing costs. [MKTS/GLOB]

Bank of England policymaker Silvana Tenreyro said there was no good evidence that cutting interest rates below zero would, past a certain point, weaken Britain's economy rather than boost it.

The FTSE 100 has recovered around 35% from a coronavirus-driven crash last year but has stayed below pre-pandemic levels due to a raft of new lockdown measures.

The domestically focused mid-cap FTSE 250 index fell 0.7% on Thursday.

Meanwhile, British new car registrations fell by an annual 35.5% last month to their lowest February level since 1959 as lockdown measures kept dealerships closed to the public, an industry body said.

Melrose Industries was the best performer on the FTSE 100, after the engineering business owner said it had begun a sale process for its Nortek air-conditioning division.

Homebuilder Vistry Group rose 3.5%, after an upbeat forecast and resuming its dividend.

Admiral fell 2.7% after the motor insurer said an expected a rise in claims when lockdowns ease would increase its loss ratio this year, with the warning eclipsing a 20% jump in 2020 earnings.

(Reporting by Shivani Kumaresan and Amal S in Bengaluru; editing by Rashmi Aich and Steve Orlofsky)

By Shivani Kumaresan and Amal S