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FTSE 100 up 0.2%, FTSE 250 falls 0.1%
OECD cuts global growth outlook, cites trade war impact
UK needs tough action on government budget policy, OECD warns
Chemring Group gains after posting record order book
GSK down after Berenberg downgrades rating on stock
Updates after markets close
June 3 (Reuters) - Britain's blue-chip stocks index ended slightly higher on Tuesday, as defence stocks climbed after the government pledged heavy defence spending and heavyweight energy stocks tracked crude oil prices higher.
The FTSE 100 .FTSE closed up 0.2%, while the midcap index .FTMC ended 0.1% lower.
The aerospace and defence sub-index .FTNMX502010 advanced 2.5% to an all-time high after Prime Minister Keir Starmer pledged the largest sustained increase in British defence spending since the end of the Cold War.
Oil major Shell SHEL.L gained 1.7%, while BP BP.L added 0.6% as crude oil prices climbed close to 2%.
On the downside, miners of both industrial .FTNMX551020 and precious .FTNMX551030 metals fell more than 1% each as prices of copper and gold came under pressure.
Despite Tuesday's gains, sentiment remained shaky as investors looked out for any developments on the trade front following U.S. President Donald Trump's Friday announcement that he would increase tariffs on imported steel and aluminium from 25% to 50%.
The Organisation for Economic Cooperation and Development (OECD) trimmed its global growth outlook and said the trade war was taking a bigger toll on the U.S. economy than before.
The Paris-based organisation also urged Britain's government to make stronger efforts to reduce borrowing and debt, just days before finance minister Rachel Reeves presents her long-term spending plans.
British equities have rebounded from their April lows, in line with a global shift into riskier assets as Trump's tariff stance softened, with the blue-chip index now sitting about 1% away from its all-time highs.
Chemring Group CHG.L jumped 6.7% after the defence contractor posted the highest-ever order book for the six months ended April 30. The stock hit a near four-year high.
Education company Pearson PSON.L dropped 6.6% after Australian peer IDP Education IEL.AX forecast a drop in annual profit.
Drugmaker GSK GSK.L shed 2.1% after brokerage Berenberg downgraded its rating to "hold" from "buy".
(Reporting by Ragini Mathur and Shashwat Chauhan in Bengaluru; Editing by Vijay Kishore and Alex Richardson)
((Ragini.Mathur@thomsonreuters.com; Shashwat.Chauhan@thomsonreuters.com))
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