UK shares trade lower with eyes on GDP data, widening trade war

July 11(Reuters) - London's main stock indexes slipped on Friday as weaker-than-expected GDP data and escalating U.S.-led trade tensions weighed on sentiment, a day after the blue-chip FTSE 100 hit a record high.

The internationally oriented FTSE 100 .FTSE fell 0.5% by 0925 GMT but was on track for a third week of gains. The midcap index .FTMC dropped 0.3% and was also set for weekly gains.

Britain's economy shrank for a second consecutive month in May, as declines in industrial output and construction outweighed growth in services, adding to domestic challenges for Finance Minister Rachel Reeves.

"It will now take something quite special for the UK to avoid an outright contraction in GDP in Q2, which doesn’t appear at all likely quite frankly given the perfect storm of downside risks," said Matthew Ryan, head of market strategy at global financial services firm Ebury.

Meanwhile, U.S. President Donald Trump ramped up his trade war by announcing 35% tariffs on Canada on Thursday, while adding that blanket tariffs of 15% or 20% would be implemented on most other trading partners.

Sectoral gains on Friday were led by precious metal miners .FTNMX551030 with safe-haven gold rising on the expanding trade war.

Fresnillo FRES.L added 2% while Hochschild HOCM.L and Endeavour rose 1.6% and 1%, respectively.

Energy giant BP BP.L shares rose 2.3% to top of the blue-chip after the company forecasted a higher upstream output production for second-quarter driving gains for oil and gas stocks .FTNMX601010.

Losses on the day were led by personal good stocks .FTNMX402040 with luxury brand Burberry BRBY.L dropping 2.2%. Dr. Martens DOCS.L fell 1.5%.

Traders are currently pricing in a 78.6% chance of a rate cut during August's Bank of England meeting, according to data compiled by LSEG.

Among individual stocks, restaurant chain operator SSP Group SSPG.L was the top loser on the midcap, falling 6.6% after UBS downgraded it to "sell".

($1 = 0.7384 pounds)

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