Commodity weakness drives FTSE fall

"I certainly think unemployment will continue to rise over the next few months and maybe into next year, and this will bring its own negative impact on aggregate demand," Batstone-Carr said.

Investors will also have the latest weekly U.S. jobless claims, May factory goods, and revised durable orders numbers to digest on Thursday.

And news out of the latest monthly European Central Bank Committee meeting will also be eyed, though no change is expected to monetary policy with euro zone interest rates already at a record low.

Miners were also hit by weaker demand for raw materials as metal prices slipped.

Xstrata , Kazakhmys , Eurasian Natural Resources , Anglo American , Lonmin and BHP Billiton fell between 1.1 and 4.1 percent.

Rio Tinto fell 2.6 percent after a $15.2 billion rights offer, the fifth-biggest on record, putting the world's top iron ore miner back into growth mode after a debt-funded purchase of Alcan had brought it to its knees.

The dip in equity prices was broad-based with defensive drugmakers and life insurers also among those well into negative territory.

AstraZeneca , GlaxoSmithKline and Shire fell 1.1 to 1.8 percent while Aviva lost 3.4 percent and Legal & General slipped 1.6 percent.

(Reporting by Simon Falush; Editing by Hans Peters)