U.K. stocks edged lower on Wednesday amid worries that U.S.-Iran tensions may escalate.
Iran fired a series of rockets at two U.S.-Iraqi airbases early this morning, raising fears of a wider conflict in the Middle East.
The U.K.'s FTSE 100 was down 38 points, or half a percent, at 7,536 after finishing marginally lower on Tuesday.
Anglo American lost 2 percent after the mining giant said it was in advanced talks to buy fertilizer maker Sirius Minerals. Shares of the latter soared 33 percent.
J Sainsbury also fell around 2 percent after the supermarket revealed a 0.7 percent fall in total retail sales for the third-quarter.
Greggs Plc., a bakery food-on-the-go retailer, dropped more than 1 percent despite raising profit forecasts.
NMC Health plunged 15 percent and Finablr slumped 18 percent after major shareholders of the two companies sold stakes.
In economic news, U.K. house prices logged their fastest growth this year in December, data from the Lloyds Bank subsidiary Halifax and IHS Markit showed.
House prices increased 1.7 percent on a monthly basis, faster than the 1.2 percent increase in November. This was the fastest gain seen this year and exceeded the expected rate of 0.6 percent.
In three months to December, house prices advanced 4 percent from last year after climbing 2.1 percent in three months to November.
Major central banks were running out of tools to fight an economic downturn, Bank of England Governor Mark Carney said in an interview with the Financial Times.
"It's generally true that there's much less ammunition for all the major central banks than they previously had and I'm of the opinion that this situation will persist for some time," the outgoing governor said.