UK stocks slide over 1% on U.S. inflation scare, weak earnings

July 14 (Reuters) - British stocks fell on Thursday as investors worried about the prospect of a more aggressive stance by major central banks to curb inflation, with a slew of worrying forecasts from companies and weak commodity prices also hurting sentiment.

The blue-chip FTSE 100 slid 1.6%, while the domestically oriented FTSE 120 index declined 1.2%.

"There is a possibility that it could cause the Bank of England to speed up," said Dan Boardman-Weston, chief investment officer at BRI Wealth Management.

"Clearly inflation is historic but commodity prices have fallen a long way in the recent weeks, and that should start having a downward pressure on certain parts of the inflation basket. The BoE is still going to be relatively hawkish but they will be thinking very carefully about how quickly they will raise rates."

Money markets are now pricing in a 72.8% likelihood of a 50 basis-point rate hike by the Bank of England in next month's meeting.

Weighing on the resource-heavy FTSE 100 index, energy and mining stocks fell 3.3% and 4.5%, respectively, tracking the drop in commodity prices as markets braced for rapid interest rate hikes that will slow economic growth and reduce demand.

Banks fell 2.9%.

A surprise expansion in Britain's economy failed to ease concerns about the weakening economic outlook amid rising inflation driven by soaring energy prices.

Britain's largest homebuilder Barratt Developments Plc fell 1.5% after it reported fewer home completions than expected for fiscal 2022.

Among small caps, motor insurer Sabre dived 39.8% to a record low after issuing a profit warning due to elevated claims inflation.

Peers Direct Line and Admiral Group dropped 11.7% and 18.1%.

Ashmore Group shed 6.3% after the emerging markets investment firm said assets under management tumbled by $14.3 billion as key global markets buckled under rising geopolitical tensions and inflation spooked investors.

Playtech fell 18.2% after Hong Kong-based investment and advisory firm TTB Partners walked away from making a takeover offer for the gambling software company, citing challenging market conditions. (Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru; Editing by Arun Koyyur and Alison Williams)