(Updates after market close)

June 29 (Reuters) - UK shares inched lower on Monday, led by

declines in miners and financials, as renewed Middle East

hostilities weighed on risk sentiment.

The blue-chip FTSE 100 index closed 0.2% lower,

while the midcap FTSE 250 was off 0.6%.

* Mining shares slipped due to a decline in gold

after the recent escalation in the Middle East fuelled inflation

concerns, with Anglo American, Fresnillo and

Rio Tinto down between 1.2% and 3%.

* British American Tobacco dipped 0.7% after the

tobacco giant said it plans to reduce its workforce by

20%,dragging on consumer staple shares.

* Shares of home construction makers mirrored

European peers, with the index down 2.4%.

* Among other movers, Melrose Industries and

Babcock fell 1.3% and 5.1%, respectively. The Ministry

of Defence said on Sunday that the UK will scrap plans to

replace its ageing destroyers to focus on drone warships.

* Bridgepoint jumped 16.1% after the private equity

group agreed to buy U.S.-based Kayne Anderson's real estate

business in a deal valued at about $1.4 billion.

* BT and Verizon announced a deal to combine

their international enterprise operations into a 50:50 joint

venture. Shares of the British telecoms group were marginally

up.

* Stocks showed little reaction to a policy speech by Andy

Burnham, who is widely expected to be Britain's next prime

minister. He reiterated his commitment to existing fiscal rules,

saying his plans for the country were consistent with the

party's 2024 manifesto.

* On the economic front, a survey showed British companies'

expectations for growth in the coming quarter fell this month to

their lowest level this year.