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FTSE 100, FTSE 250 down 0.3% each

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Miner Fresnillo to acquire Canada's Probe Gold ( PROBF )

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Auto Trader slides on management change

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UK house prices rise in October, defying pre-budget nerves

By Avinash P

Oct 31 (Reuters) - British stocks edged lower on Friday,

with the blue-chip FTSE 100 set to extend its fall in the

previous session, as markets cooled after a record run earlier

this month.

Investors were also cautious ahead of the Bank of England's

monetary policy decision next month and the government's budget

later in November.

The FTSE 100 and the domestically focused FTSE 250

were down 0.3% each, as of 1210 GMT.

Still, both indexes were on track for monthly gains, with

the FTSE 100 touching record highs multiple times in October and

the midcap index trading close to four-year highs.

Pharmaceuticals, financials and mining stocks were among top

sectoral performers for the month, boosted also by a strong

start to the earnings season from companies such as HSBC ( HSBC )

and GSK.

Signs of inflation staying tame increased bets that the Bank

of England could cut interest rates this year, while globally,

thawing U.S.-China trade tensions and dovish monetary policy by

the U.S. Federal Reserve also aided risk taking.

Investors expect no change to Britain's benchmark interest

rate in November, but are pricing in a cut in December,

according to data compiled by LSEG.

"More dovish sounding Bank of England, particularly in light

of the upcoming budget and potential tax increases could be

favourable for the FTSE," said Fiona Cincotta, senior market

analyst at City Index.

Auto Trader's shares dipped 3.4% after the

automotive platform announced its operations chief will step

down.

In company news, Fresnillo said it has agreed to

buy Canada's Probe Gold ( PROBF ) for C$780 million ($556

million) in cash, marking the gold miner's expansion into North

American markets. Shares of the UK company inched up 1%.

On the data front, lender Nationwide said that British house

prices rose in October.