- Retailers up on Zara-owner Inditex's strong update
- House prices post first annual drop since 2012 - Halifax
- Croda falls on Goldman Sachs rating downgrade
- Harbour jumps on report of merger talks with Talos
- FTSE 100 down 0.1%, FTSE 250 off 0.2%
June 7 (Reuters) - Britain's main stock indexes slipped on Wednesday as shares of homebuilders dipped on dismal domestic housing prices data, while speciality chemicals group Croda International dropped to the bottom of the benchmark FTSE 100.
The resource-heavy FTSE 100 edged 0.1% lower as of 0824 GMT, while the domestically-focused FTSE 250 midcap index was down 0.2%.
British house prices dropped on an annual basis in May for the first time in 11 years, mortgage lender Halifax said, prompting a 1.3% decline in homebuilders' stocks.
"We've seen rising interest rates feeding into mortgages, with expectations that it will continue to rise over the coming six months if the Bank of England really wants to get inflation under control," said Daniela Hathorn, senior market analyst at Capital.com.
"So, it's not unexpected to see the drop in house prices ... I thought we would see a greater drop."
Meanwhile, forecasts from the Organisation for Economic Co-operation and Development revealed that Britain will have the highest inflation of any leading economy in 2023 and Prime Minister Rishi Sunak will miss his promise to halve price growth this year.
Also weighing on sentiment was data showing China's exports shrank much faster than expected in May and imports fell.
Chemicals stocks bore the brunt of the selling pressure, falling 1.5%, dragged by a 2.3% drop in Croda International after Goldman Sachs lowered its rating on the stock to "neutral" from "buy".
Retailers were among the rare gainers on a strong update from Zara-owner Inditex.
Harbour Energy jumped 4.3% after Reuters reported that the country's largest North Sea oil and gas producer is in talks to merge with Gulf of Mexico peer Talos Energy .
Vodafone (VOD.L) gained 3.2% after Reuters reported the company and Hutchison (0001.HK) are in the final stages of a merger agreement for their British operations.
Reporting by Ankika Biswas in Bengaluru; Editing by Savio D'Souza and Janane Venkatraman