UPDATE 3-Energy shares, Trump's tariff threat drag FTSE 100 lower

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* FTSE 100 down 2.3%, FTSE 250 off 1.9%

* Energy stocks lead declines for second day

* Data shows UK housing market grinding to a halt

* UK factories suffer worst month in three decades-IHS
Markit

* EasyJet slides as Ryanair keeps flights grounded until
July
(Updates with market closing)

By Sagarika Jaisinghani and Devik Jain

May 1 (Reuters) - A slump in energy company stocks led the
UK's FTSE 100 index lower on Friday, with sentiment also dented
by U.S. President Donald Trump's threat to impose new tariffs on
China over the coronavirus crisis.

Oil major Royal Dutch Shell shed another 7.0% on a
ratings downgrade a day after it slashed dividend for the first
time since World War Two. Rival BP Plc was also
down.

The blue-chip FTSE 100 fell 2.3%, also hit by miners
and travel stocks.

The two-day slide for the index marks an abrupt about-turn
in sentiment this week, with investors turning cautious about a
revival in business activity even though several countries have
started relaxing stay-at-home orders.

Trump said late on Thursday his hard-fought trade deal with
China was now of secondary importance to the pandemic and his
administration was crafting retaliatory measures over the
outbreak.

With most of European markets closed for May 1 holiday, the
full effect of Trump's threat would not be felt until next week,
but it stands to derail the recent rally that led the benchmark
STOXX 600 to post its best month in April since 2015.

"Stocks are starting to looking a little heavy, and that's
why you're seeing a lot of caution as we head into the end of
this week and begin the month of May," said Chris Beauchamp,
chief market analyst at IG Group.

"If you're looking into May and the rest of Q2, you will
start to see a lot more bad data."

Data on Friday showed the lockdown measures were grinding
the housing market to a halt, while another report said British
manufacturers suffered the biggest fall in output and orders for
at least three decades in April.

British Airways operator IAG fell 3.1% as details
of its plans to cut staffing, including a quarter of its pilots,
and weather the collapse in air travel under the coronavirus
continued to tumble out.

Low-cost airline easyJet Plc slumped 5.8% to the
bottom of the FTSE 100 after rival Ryanair said it would
ground more than 99% of its flights until July.

But British state-backed lender Royal Bank of Scotland
gained 2.4% as its quarterly results beat analyst
expectations, thanks in part to a rise in income from a spike in
trading in volatile markets at its previously loss-making
investment bank NatWest Markets.
(Reporting by Sagarika Jaisinghani and Devik Jain in Bengaluru;
Editing by Patrick Graham, Sriraj Kalluvila and Arun Koyyur)