UPDATE 2-FTSE down on trade, Italy jitters; UK GDP shock hits midcaps

* FTSE 100 down 0.4%, FTSE 250 down 0.2%
* Trade worries, Italy shock hurt main index
* Poor UK GDP data drags mid-caps lower
* WPP climbs after Q2 update
* On The Beach hammered after warning on results

(Adds news items, analyst comment, updates share prices)
By Shashwat Awasthi
Aug 9 (Reuters) - London's FTSE 100 slipped on Friday as a
mix of worries over the U.S.-China trade dispute and political
turmoil in Italy weighed on heavyweight banks and miners, while
the mid-cap index fell after a surprise downturn in Britain's
economy last quarter.
The FTSE 100 .FTSE gave up 0.4% to end its worst week in
three months with a 2% drop. The domestically-focused FTSE 250
.FTMC handed back earlier gains to end 0.2% lower.
Miners were hit as President Donald Trump said he was not
ready to make a trade deal with China, the world's largest
metals consumer. Financial stocks .FTNMX8350 dropped after
Italy's ruling coalition collapsed and League party leader
Matteo Salvini called for early elections. However, losses were capped by a 7.5% surge in ad firm WPP
WPP.L after better-than-expected organic sales performance in
the second quarter. After posting gains in June and July, the FTSE 100 is on
course for its biggest monthly fall since October, as headlines
around escalating tensions between Washington and Beijing
dominate news.
A 6% post-earnings jump in gambling firm William Hill
WMH.L and drugmaker Hikma HIK.L was not enough to support
mid-caps, which dipped as Britain's economy shrank for the first
time since 2012 in the second quarter. "Any way you cut it, a 0.2% contraction in the second
quarter is pretty disastrous news," Spreadex analyst Connor
Campbell said. "It is the economic manifestation of the
country's Brexit anxieties."
On The Beach OTB.L slumped more than 14%, its worst day in
more than a year, after the online travel agent warned annual
performance would miss its own forecasts. AIM-listed Burford Capital BURF.L , whose shares tanked 46%
earlier this week after short-seller Muddy Waters criticised its
accounts and took a short position in the fund, jumped almost
12% after its directors bought shares in the company.