* FTSE 100 down 1.4 pct; Midcaps down 1.2 pct
* UK blue chips on track for worst month in a decade
* Rolls Royce hit by delays on Airbus jet engine production
* Energy, miners under pressure(Add details, updates prices)
By Josephine Mason
LONDON, Oct 26 (Reuters) - British shares slumped to a neartwo-year low on Friday on growing concerns about slowingearnings growth, with investors punishing Rolls Royce and RBS.
The FTSE 100, on track for its biggest monthly dropin a decade, closed down 1.4 percent as selling acceleratedafter a weak start on Wall Street where grim earnings fromAmazon and Alphabet shook confidence.
Financials led the UK pack lower with a 21-point drop,followed by the energy sector, which was hit by weaker oilprices and a strengthening U.S. dollar afterbetter-than-expected U.S. GDP data.
Only 10 stocks were in positive territory, with RandgoldResources rising 3.6 percent as investors sought shelterin safe-haven gold assets and defensive sectors. Bullion hitthree-month highs.
Notching up a fifth straight weekly loss, the Midcap FTSE250 was down 1.2 percent. Pan European stocks were setfor their biggest monthly drop since August 2011.
A slew of downbeat corporate outlooks with warnings ofhigher raw material costs, damage from tariffs and waningChinese demand underscored worries about corporate growth.
Analysts have been downgrading their forecasts for Europeanearnings at their fastest pace since 2016, according toRefinitiv IBES data.
"There aren't many more lifelines for FTSE heavyweightsectors, with base metals down on China-growth worries and oilstill in the doldrums on perceived weak demand," Mike van Dulkenand Artjom Hatsaturjants at Accendo Markets said in a note.
RBS fell 5 percent, touching its lowest sinceFebruary 2017, after the UK bank warned of economic uncertaintyand its profit lagged forecasts. The lender said it had taken a100 million pound ($128 million) impairment provision to accountfor greater uncertainty.
"The latest results are a bit of a curate's egg," said LaithKhalaf, senior analyst at Hargreaves Lansdown. "The headlinenumbers are ahead of expectations, but this is largely a matterof one-off items toppling onto the right side of the scales.
"The core business is looking pretty stagnant, at best, andthe bank's interest margin is heading in the wrong direction,despite rising rates," Khalaf added.
Rolls Royce was rocked by news it will produce fewerengines for Airbus' new A330neo jet than expected,sending its shares down as much as 13 percent to 1-1/2 yearlows. It recovered some ground to close down 3.5 percent.
Calls for Europe to halt arms sales to Saudi Arabia afterthe killing of journalist Jamal Khashoggi added pressure to thedefence sector.
Mining, metals and oil companies were also among the biggestlosers, with Evraz topping the loser board with a6.3-percent drop and oil major BP down 1.4 percent,tracking broader commodity prices lower.
Among midcaps, Travis Perkins and Babcockwere hit after LafargeHolcim's, the world's largestcement maker, became the latest building materials company towarn of higher costs.
Pensions provider Just Group jumped 8 percent,extending recent gains, after UK regulators on Thursday delayedthe introduction of new rules on equity release mortgages.($1 = 0.7797 pounds)(Reporting by Josephine Mason; additional reporting by HelenReidEditing by Mark Heinrich and Susan Fenton)