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UPDATE 2-UK midcaps slip on weak data; trade news cushions FTSE fall

By Muvija M and Shashwat Awasthi

* FTSE 100 down 0.3%, FTSE 250 down 0.7%

* Ashtead biggest loser on the main index

* Modest trade optimism returns

* Ted Baker tanks after a cocktail of bad updates

* UK GDP data underwhelming (Adds news items, analyst comments, updates to closing prices)

By Muvija M and Shashwat Awasthi

Dec 10 (Reuters) - Britain's mid-cap index tumbled on Tuesday after lacklustre domestic growth data, while the FTSE 100 came off its earlier lows on a report that planned U.S. tariffs on China could be delayed.

The bluechip index had slid as much as 1.3%, weighed down by a more than 6% drop in Ashtead after the industrial firm warned of challenging conditions in the UK.

The bourse subsequently recouped a bulk of those losses to end 0.3% lower, boosted by a Wall Street Journal report that negotiators from Washington and Beijing were planning on delaying tariffs set to come into effect this Sunday.

"Though it is not the agreement the markets are so desperate for, a can-kick is better than nothing," Spreadex analyst Connor Campbell said.

The FTSE 250 shed 0.7%, as recent optimism over a prospective victory for the Conservative Party in Britain's Dec. 12 election gave way to concerns about slowing economic growth.

Data showed Britain's economy grew at its slowest annual pace in nearly seven years in October. Though sterling managed to shrug off the negative reading, more domestically-focussed stocks remained pressured.

Fashion retailer Ted Baker plunged as much as 36%, to levels not seen since 2003, after the sudden exit of its chief executive and chairman as it issued a second profit warning in two months and suspended its dividend.

The retailer is bracing for its worst annual performance since its 1997 listing.

"Ted Baker is truly having the nightmare before Christmas," AJ Bell investment director Russ Mould said. "The business appears to be unravelling... given how Ted has gone from being a retail superstar to one very much out of fashion."

Some of the UK's biggest retailers dragged on the main bourse after data showed total grocery sales growth slowed in the 12 weeks to Dec. 1. Morrisons dropped 3% and Sainsbury's declined by 1.4%.

Engine maker Rolls-Royce fell 3.3% after the resignation of Bradley Singer, a representative of its largest shareholder, the activist investor ValueAct Capital.

Meanwhile, Tullow Oil outperformed the mid-caps as it jumped 14.3%, a day after plunging 70% following the exit of its CEO and dividend suspension. (Reporting by Muvija M and Shashwat Awasthi in Bengaluru; Editing by Arun Koyyur and Rosalba O'Brien)