* FTSE 100 down 1.2 pct
* Broad-based decline across most sectors
* Banks extend post-ECB rally
* Bunzl, Burberry fall after downgrades
* Mid-cap pub operators in focus after results (ADVISORY- Follow European and UK stock markets in real time onthe Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
By Kit Rees and Alistair Smout
LONDON, Sept 9 (Reuters) - British shares fell on Friday,posting their biggest weekly decline since May, after theEuropean Central Bank made no changes in its asset-buyingprogramme.
The FTSE 100 index closed down 1.2 percent at6,776.95 points, with the losses accelerating after U.S. marketsopened, and dropped 1.7 percent for the week. The decline wasbigger than the losses after Britain voted to leave the EuropeanUnion.
On Thursday, the ECB kept rates on hold and, whilemaintaining the timetable for the bank's quantitative easingprogramme, President Mario Draghi said that a possible extensionof the programme had not been discussed, sending Europeanmarkets lower.
Wall Street opened sharply lower after one usually dovishFed official warned of the risks of not raising rates soon. Somealso cited heightened geopolitical tensions after North Koreacompleted a nuclear test as dampening appetite.
The falls were broad-based, with all sectors bar one innegative territory. Growth-sensitive stocks such as consumergoods were especially hit.
However, banks rose, with Royal Bank of Scotland up2.3 percent and Barclays up 0.9 percent. Analysts saidthat Draghi's lack of an indication for any further rate cutshad been taken as a positive by investors.
"These lower interest rates are really damaging the banks,"said Jonathan Roy, advisory investment manager at CharlesHanover Investments.
"Whereas there has been a continual cutting in rates overthe last 18 months, which has been really damaging for corebanking profitability ratios, it signalled yesterday that theremight be a plateau now in deterioration of those ratios, whichis being taken as a positive for the banks currently."
Broker downgrades weighed on Bunzl, which dropped3.4 percent after HSBC cut its rating on the stock to "hold",citing macro uncertainty, and Burberry, which fell 2.5percent after Goldman Sachs removed the luxury goods stock fromits Sustain Focus List.
"Over the last two years (FY14-16), Burberry has seen weakerthan expected financial performance," Goldman said in a note.
"The key drivers of this deterioration have been subduedsales growth and increasing costs associated with the company'sstrategic investments ... We are concerned that these headwindscontinue."
Outside of the blue chips, pub chain operator J.D.Wetherspoon rose 2.4 percent after reportingbetter-than-expected results.
Peer Greene King, however, dropped 6 percent afterreporting a slowdown in like-for-like sales growth and sayingthat trading could get tougher as a result of Brexit . (Editing by Larry King)
