FTSE falls 2.5 pct on U.S. jobs data

British data showed a decline in activity in the construction sector accelerated in June, and lenders said they did not expect much of a pick-up in demand in the third quarter.

Data showing the jobless rate in the 16-nation euro zone rose to 9.5 percent in May, the highest since 1999, also weighed on the FTSE.

"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," said Jeremy Batstone-Carr, analyst at Charles Stanley.

The fall in equity prices was broad-based, with defensive drugmakers and banks also among those into negative territory.

AstraZeneca , GlaxoSmithKline and Shire fell 2.4-2.8 percent.

Heavyweight HSBC was 1.8 percent lower, while Lloyds Banking Group , Royal Bank of Scotland and Standard Chartered fell 2.1-3.4 percent.

WPP Group slipped 7 percent, the biggest loser on the index, as Citigroup downgraded the advertising group's rating to "sell" from "neutral" with a reduced target price of 340 pence, down from 440 pence.

With most stocks down on the day, the world's biggest spirits group Diageo topped the risers chart, up 0.9 percent, as traders continued to view its decision, announced on Wednesday, to close two Scottish plants as a good move in the current downturn.

(Editing by Dan Lalor)