UPDATE 2-UK shares in tailspin as global woes deepen, Brexit angst lingers

* FTSE 100 down 3.2%, FTSE 250 down 2%

* Financials, oil majors among biggest drags

* Flutter Entertainment climbs on M&A news

* Metro Bank rises on bond deal (Adds items, analyst comments, updates to closing prices)

By Yadarisa Shabong and Muvija M

Oct 2 (Reuters) - London's FTSE 100 index endured its worst day since January 2016 on Wednesday as an overhang from weak U.S. manufacturing data rekindled global growth worries and cast a shadow over markets, while investors scrambled for more clarity as Brexit looms.

The FTSE 100 plunged 3.2% to its lowest level in more than a month and the domestically-focused FTSE 250 dropped just shy of 2%, close to a one-month low.

Losses were seen across the board on both indexes as investors grappled with a deepening Brexit crisis and fears of a global slowdown amid heightened transatlantic trade tensions, while weak U.S. private payrolls data also added to those fears.

"The declines now appear to be accelerating on rising concern that the ongoing deterioration in the manufacturing numbers will at some point start to manifest itself in the much larger services sector," CMC Markets analyst Michael Hewson said.

At home, Prime Minister Boris Johnson tabled a 'final Brexit offer' to the European Union and warned that unless the bloc compromised, Britain would leave without a deal at the end of this month.

"The prospect of a no-deal Brexit is weighing on financial stocks, as the Bank of England is likely to cut rates should that occur," CMC Markets analyst David Madden said, adding that banks' margins could be squeezed in that scenario.

HSBC, which has also been weakened by the Hong Kong protests, fell 2.7%. The global bank dragged on the blue-chip index along with oil majors BP and Shell, which tracked losses in crude prices.

Souring the already fear-stricken mood, the World Trade Organization authorized the U.S. to apply tariffs worth $7.5 billion annually on the European Union, including the UK, over illegal EU subsidies handed to Airbus.

In a sea of red, the only green shoot was Flutter Entertainment, which jumped 7% after agreeing to an all-share deal with Poker Stars owner. Shares of mid-cap rival William Hill added 3.6% on the M&A news.

Tesco, Britain's No. 1 retailer, ended marginally higher after rising as much as 2.3% on better-than-expected earnings. Shares had opened lower after the surprise resignation of its Chief Executive Officer Dave Lewis.

"He will certainly be a hard act to follow, given that under his guidance he pulled Tesco back from the precipice," Hewson said.

Another notable mover was Metro Bank that surged 26.7% on its best day ever after the troubled lender successfully relaunched a bond deal. It had also separately announced the exit of its chairman and founder Vernon Hill. (Reporting by Muvija M and Indranil Sarkar in Bengaluru; Editing by Bernard Orr and Alexandra Hudson)