UK's FTSE 100 slips on dour earnings; NatWest falls

UK's FTSE 100 slipped on Wednesday as negative corporate updates from miner Rio Tinto and bank Lloyds weighed on the blue-chip index, while shares of NatWest dropped after the bank's CEO stepped down.

The FTSE 100 index lost 0.2%, while the more domestically focussed FTSE 250 midcap index was flat. NatWest Group fell 2.9% after CEO Alison Rose stepped down with immediate effect as she admitted to a "serious error of judgment" in discussing the bank's relationship with former Brexit party leader Nigel Farage with a BBC journalist.

UK earnings season picked up pace with Lloyds Banking Group , Britain's biggest mortgage lender, posting a pre-tax first-half profit below analysts' forecast compiled by the bank. The lender fell 2.7%, while the UK banks index slipped 0.9%.

"Generally, results have been more resilient than expected but the key is what people are saying in terms of their outlook," said Georgina Cooper, co-manager of the BNY UK Equity fund. "A lot of shares have already reacted to the near term but it's really about the longer term ... and now we're starting to see normalised situations (after) COVID."

Industrial metal miners slipped 1.9% as London-listed shares of Rio Tinto lost 2.0% after slashing its interim dividend and reporting its lowest first-half underlying earnings in three years. Rolls-Royce soared 19.3%, to hit its highest level in over three years after the aero-engineering company raised its full-year operating profit forecast.

The aerospace and defence sector added 5.1%. Dunhill cigarettes maker British American Tobacco gained 2.2% after reporting a jump in half-year profit, while luxury automaker Aston Martin Lagonda Global Holdings rose 4.2% on posting a smaller pre-tax loss for the second quarter.

Investor focus would now shift to the U.S. Federal Reserve, which is widely expected to raise interest rates by 25 basis points later in the day.