The FTSE 100 failed to make headway on Monday despite an early rise, as traders looked ahead to Chancellor Rachel Reeves’s Spring Statement later in the week.
London’s blue-chip index fell nine points to finish the day at 8,638, a 0.1% drop.
The flat performance came as a survey of businesses indicated that the UK’s private sector grew at the fastest rate for six months in the first weeks of March.
The S&P Global flash UK composite purchasing managers’ index (PMI) came in higher than previous months, though economists cautioned that the uptick in activity “doesn’t signal a recovery”.
The reading comes days before Ms Reeves launches the Government’s spring statement on Wednesday.
However, the latest survey indicated business expectations for the year remained close to the 25-month low seen in January amid concerns over tax and labour cost increases due to take place in April, linked to the autumn budget.
Elsewhere, Germany’s Dax index fell 0.2% and France’s Cac 40 dropped 0.3%.
Meanwhile on Wall Street, the S&P 500 was up 1.6% and the Dow Jones ahead by 1.2% shortly after UK markets closed.
Sterling was down 0.2% against the dollar at 1.2903, while it was 0.1% up against the euro at 1.1960.
In company news, Morrisons said hundreds of jobs are at risk of redundancy because of plans to close some of its cafes, convenience stores, florists and fresh food counters.
The supermarket chain said it was costing more to run the services than it was making from customer spending.
Rami Baitieh, Morrisons’ chief executive, said the changes were a “necessary part of our plans to renew and reinvigorate” the chain and invest in areas that “customers really value”.
Meanwhile, Sir Martin Sorrell’s marketing firm S4 Capital posted widened annual losses and said trading conditions would remain tough amid a pull-back in tech spend and global trade tariff concerns.
It slashed its workforce by 7% to 7,166 last year and said it would “continue to focus on our cost base and will take further action to support profitability”.
Shares in the group, however, jumped 5.6% after it promised its first investor dividend.
The biggest risers on the FTSE 100 were Pershing Square, up 152p to 3910p, Polar Capital Technology Trust, up 10p to 317p, Prudential, up 22.2p to 820.4p, Scottish Mortgage Investment Trust, up 25.8p to 991.4p, and Anglo American, up 57p to 2312p.
The biggest fallers on the FTSE 100 were Vodafone, down 3.34p to 72p, JD Sports, down 2.02p to 73.74p, British Land, down 9.6p to 360p, BP, down 9.2p to 440.8p, and Haleon, down 7.5p to 385.5p.
