LONDON'S top-flight index slipped into negative territory as the Treasury's warning over Brexit and the tumbling oil price kept a lid on market gains.

The FTSE 100 Index was 19.9 points lower at 6136.4 after new Treasury analysis suggested a vote to leave the European Union could plunge the country into a year-long recession.

It found that the short-term impact of withdrawal from the EU would lead to between 520,000 and 820,000 jobs being lost, house prices falling by between 10% and 18%, and public sector borrowing rocketing by between £24 billion and £39 billion.

Elsewhere, the sliding cost of copper and Brent crude took its toll on the market, leading oil and mining giants into the red.

The price of oil edged down 1% to 48.25 US dollars a barrel in the face of the strong dollar and Iran's pledge to ramp up production.

Royal Dutch Shell was among the biggest fallers, down 22p to 1667p, while BP was 4p lower at 357.5p, and BHP Billiton dropped 6.5p to 811.4p.

Royal Mail was the biggest riser, climbing more than 4%, after it was handed an upgrade from RBC Capital and brokers Cantor Fitzgerald.

Cantor analysts said Royal Mail's full-year update was "encouraging", with revenue and operating profits up year-on-year and ahead of consensus estimates.

Across Europe, Germany's Dax was down 0.66%, while the Cac 40 in France was 0.74% lower.

The pound was down 0.8% against the dollar at 1.444, as investors expect the US Federal Reserve to impose an interest rate hike in the near future.

The pound was also 0.5% down against the euro at 1.297.

In stocks, Royal Mail was up 21.1p to 513p after RBC Capital lifted its recommendation for the company from underperform to perform.

It said the coming months look set to shed light on the firm's wage inflation and pension costs, allowing it to focus on driving higher efficiency.

Elsewhere, travel stocks rose as budget airline Ryanair said it would cut fares by 7% this year as annual profits soared by almost half.

The carrier, which is listed on the London and Dublin stock exchanges, said it expects to reduce fares as it bids to maintain market share across a European airline industry hit by terror attacks in Brussels and Paris.

The cuts in fares come as Ryanair posted profits after tax up 43% to 1.24 billion euro (£959 million) in the year to March compared with a year ago, just short of City forecasts of 1.3 billion euro (£1 billion).

Shares were up 0.3p to 13.7p, as British Airways-owner IAG and rival easyJet climbed 6p to 522.5p and 28p to 1498p respectively.

Shares in Mitie were 16.4p higher at 290p despite revenues at the outsourcing group slipping as it came under pressure from cuts to healthcare budgets and uncertainty caused by next month's Brexit vote.

The FTSE 250 firm, whose clients include Rolls-Royce and the Home Office, said sales fell 1.8% to £2.2 billion in the year to the end of March compared with a year ago, as local council care budgets have been squeezed by central government.

The biggest FTSE 100 risers were Royal Mail up 21.1p to 513p, 3I Group up 14.5p to 520p, DCC PLC up 130p to 6615p, and ARM Holdings up 18.5p to 963p.

The biggest fallers were Inmarsat down 30.5p to 724.5p, Tesco down 4.2p to 160.1p, Vodafone Group down 3.3p to 225.9p, and Old Mutual down 2.4p to 167.3p.