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* Halfords rises on plans to buy Axle Group
* Johnson Matthey, Darktrace down on departure from FTSE 100
* Bailey warns economic impact from COVID-19 still strong
* FTSE 100 down 0.6%, FTSE 250 off 0.9%
(Updates to close)
By Bansari Mayur Kamdar
Dec 2 (Reuters) - UK shares fell on Thursday as fears around
the Omicron coronavirus variant grew with several countries
reporting cases, while warnings about inflation from major
central banks added to the downbeat mood.
The benchmark FTSE 100 index ended 0.6% lower, while
the domestically focussed mid-cap index fell 0.9%.
Bank of England (BoE) Governor Andrew Bailey said on
Wednesday the economic impact from COVID-19 remained strong,
while noting inflationary pressure from supply chain
difficulties and increased demand for consumer goods.
Banks slipped amid uncertainty about whether
the BoE will hike interest rates this month.
"Raising interest rates at a time when the economy is
expected to slow and see restrictions, maybe potentially even
lockdowns, is just going to compound the economic pain," said
Oanda analyst Craig Erlam.
"What we're seeing with financials is a reflection of the
fact that it (Omicron) makes the central bank's job of
tightening monetary policy a bit more challenging."
Prime Minister Boris Johnson issued a "call to get jabs in
arms" on Wednesday as Britain stepped up its COVID-19 booster
programme to fend off the Omicron variant after another 10 cases
of the new strain were identified, bringing the total to 32.
Postal and delivery firm Royal Mail fell 4.6% and
was among the worst performers on the blue-chip FTSE 100 as it
traded ex-dividend.
Johnson Matthey and Darktrace dropped 2.2%
and 8.7% respectively after index manager FTSE Russell confirmed
the companies were set to leave the FTSE 100.
Halfords Group rose 6.5% after saying it would buy
Axle Group for 62 million pounds ($83 million) as the cycle
retailer shifts focus to its motoring services business.
(Reporting by Bansari Mayur Kamdar and Amal S in Bengaluru
Editing by Uttaresh.V and Mark Potter)
