THE pound lost ground against a stronger euro as investor jitters around Catalan independence momentarily eased.

Sterling fell 0.3 per cent versus the eurozone currency to 1.114, while the pound traded flat against the US dollar at 1.320.

The euro was experiencing a slight recovery after Catalonia temporarily suspended its independence declaration to allow for talks, providing some momentary relief for European investors.

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Connor Campbell, a financial analyst at SpreadEx, said: "On a day suffocating in its dullness the euro remained the only real point of interest following the latest developments between the Spanish government and Catalonia.

"Despite the situation being far from settled, with PM Mariano Rajoy responding to the 'suspension of the effects of the declaration of independence' by asking Catalan president Carles Puigdemont to clarify whether Madrid should read that as, well, a declaration of independence, the (very) gradual move away from the current uncertainty seems to have somewhat reassured the euro."

But the weaker pound was not enough to lift the FTSE 100, which ended the day relatively flat.

London's blue chip index fell by 0.06 per cent or 4.46 points to 7,533.81.

Movement among its European peers was also relatively subdued, with the French Cac 40 down 0.02 per cent, while the German Dax ended the day up 0.17 per cent.

Brent crude prices fell 0.4 per cent to $56.28 despite Opec issuing forecasts for higher demand in 2018, which could help re-balance global supply levels.

In UK stocks, Mondi slumped 163p to 1,926p, making it the worst performer on the FTSE 100.

It came after the paper and packaging group issued a profit warning, even as it clocked an eight per cent rise in third-quarter operating profit to €245 million (£219m).

Mondi said its underlying performance for the year would come in "modestly below market expectations" due to rising cost pressures and negative currency effects.

Merlin Entertainment edged lower by 4.6p to 463.6p after the company confirmed that it was not in takeover talks with SeaWorld, a week after reports surfaced suggesting it had approached the group.

In a short statement, Merlin said: "We can confirm that Merlin is not involved in any discussions that might lead to an acquisition of SeaWorld or any of its constituent parts."

Shares in global recruitment giant Page plunged 48.4p to 477.1p. The company said Brexit uncertainty continued to take its toll on hiring, and revealed a 7.6 per cent fall in third quarter gross profits to £34.9 million in the UK, which accounts for nearly a fifth of the group's business.

Telford Homes dropped 9.5p to 398.75p after announcing that first-half profits were likely to be "significantly lower" than the comparable period in 2016, due to the "programmed timing of development completions".

Dunelm shot up 44p to 745p as the homeware retailer reported a 24.8 per cent rise in total group revenue to £247.9m, thanks in part to favourable weather, which helped drive more customers to its stores in the first quarter.

The biggest risers on the FTSE 100 were Whitbread up 133p to 4,028p, NMC Health up 94p to 2,928p, Smith & Nephew up 42p at 1,401p, and easyJet up 36p at 1,289p.

The biggest fallers on the FTSE 100 were Mondi down 163p to 1,926p, Smurfit Kappa Group down 67p to 2,210p, BHP Billiton down 30p to 1,366.5p and WPP down 27p at 1,372p.