(For a live blog on European stocks, type LIVE/ in an Eikonnews window)
* FTSE 100 down 0.3 pct, set to end August with 3.3 pct loss
* Trade war worries, sterling strength weigh
* Whitbread soars after $5.1 bln Costa deal
By Kit Rees
LONDON, Aug 31 (Reuters) - Britain's top share index fell onFriday and was set to end the month with a loss as a strongerpound and broader worries over an escalation in a trade warbetween the United States and China dented appetite for UKstocks.
The blue-chip FTSE 100 was down 0.3 percent at7,495.63 points by 0904 GMT as cyclical sectors fell, while midcaps gained 0.2 percent.
Poor sentiment over trade hit stock markets across Europe,weighing on more volatile sectors, such as financials andcommodity stocks.
Reports that U.S. President Donald Trump was planning newtariffs on China ramped up the trade dispute between the twoeconomic powers.
"The FTSE 100 looks set to end the week on a downbeat notewith a threat from Donald Trump to pull the U.S. out of theWorld Trade Organisation helping to revive fears over globaltrade,” AJ Bell investment director Russ Mould said.
Closer to home, Trump rejected an offer from the EuropeanUnion to eliminate tariffs on cars and said the EU's tradepolicies are "almost as bad as China", a media report said.
Oil majors BP and Royal Dutch Shell weredown 0.7 percent and 0.5 percent respectively as the price ofoil fell.
Likewise, a weaker copper price was a drag on heavyweightminers. Shares in Glencore, BHP Billiton, RioTinto and Anglo American all fell between about0.3 percent and 1 percent.
However, Whitbread's shares were standout gainers.
They soared 16 percent to hit their highest level sinceDecember 2015 after agreeing to sell the group's Costa coffeechain to Coca-Cola Co for $5.1 billion.
"As changes of direction go, the announcement by WhitbreadCEO Allison Brittain that the company is selling Costa toCoca-Cola...rather than the plan announced in April to spin itoff and list it as a publicly traded company is one deserving ofkudos," Northern Trust Capital Markets analyst Oliver Shermansaid.
Among fallers, Sage Group dropped nearly 7 percentafter announcing the departure of its CEO.
More broadly, a stronger pound also weighed on the FTSE'sdollar-earning constituents for a third session. The currencyremained near a one-month high, boosted by hopes of abreakthrough on Brexit following comments from the EuropeanUnion's chief Brexit negotiator Barnier this week.
The FTSE 100 was on track to end August with a 3.3 percentloss, as worries over a possible "no-deal" Brexit nagged.(Reporting by Kit ReesEditing by Louise Ireland)