THE FTSE 100 closed lower on Thursday as tensions continue between the US and China over their trading relationship.

The blue chip index was pulled down by 0.33% to 7,238.55 points.

"Things do not seem to be going well between the US and China, so much so that the 'phase one' trade deal may be pushed to 2020, if it materialises at all," said Connor Campbell, an analyst at Spreadex.

"What has helped prevent a full-blown market freak-out is the peppering of optimism-chasing soundbites, mainly from China, including positive chatter from both vice premier Liu He and commerce ministry spokesman Gao Feng."

Meanwhile, the Dow Jones fell further away from its recent record high of more than 28,000 points. The index of US companies was trading at 27,738 points.

Sterling fell by 0.05% against the dollar to 1.2916. Against the euro, it was down 0.06% to 1.1666.

France's Cac closed lower by 0.22% and Germany's Dax was 0.16% down.

In company news, British Gas owner Centrica has revealed it lost another 107,000 household accounts, as it also upped its annual cost savings by £50 million.

But the UK's biggest gas and electricity supplier said it had eased the rate of customer losses, which were lower than the first half of the year, when it shed 178,000 accounts.

William Hill has said it remains "on track" to hit forecasts after closing 700 of its betting shops following the Government crackdown on fixed-odds betting terminals (FOBTs).

The gambling giant closed the stores, which it said would impact 4,500 jobs, during the past 17 weeks as it sought to mitigate the impact of the reduction of the FOBT maximum stake to £2 from £100.

Shares in Royal Mail have dived after it warned that the company's transformation programme is "behind schedule", despite improving profits and revenues over the past six months.

The delivery giant's shares slid 16.7% to 192.4p in early trading after it also cautioned investors that its UK business could make a loss in the next financial year.

The competition watchdog has kicked off a two-month probe into Hasbro's plans to take over Peppa Pig maker Entertainment One.

The Competition and Markets Authority (CMA) said it will investigate if the $4 billion dollar takeover (£3.1bn) is likely to impact competition in the UK.

International oil standard Brent crude rose 1.9% to $63.60.

The biggest risers on the FTSE 100 were Centrica, up 6.62p to 79.32p, British American Tobacco, up 110.5p to 2,971.50p, Kingfisher, up 3.5p to 197.50p, Admiral, up 33p to 2,060.00p, and Hiscox, up 19p to 1,275.00p.

The biggest fallers on the FTSE 100 were Johnson Matthey, down 227p to 2,989.00p, Fresnillo, down 20.8p to 598.60p, Imperial Brands, down 51.8p to 1,709.20p, Evraz, down 10.6p to 353.10p, and Bunzl, down 47p to 1,971.00p.