FTSE slides 5.2 pct on commodities, gloomy UK data

* Heavyweight commodity stocks fall on growth outlook * Banks fall, pressured by sliding UK property prices * M.Stanley: 2009 another "testing year" for UK investors

By Dominic Lau

LONDON, Dec 1 (Reuters) - Britain's leading share index slid 5.2 percent on Monday as concerns over demand for raw materials hit heavyweight commodity stocks, while weak data highlighted problems facing the UK economy.

The FTSE 100 .FTSE closed 222.52 points lower at 4,065.49, after gaining 13.4 percent last week, its best-ever weekly performance. More than 1.0 billion shares changed hands, compared with last week's daily average of 1.29 billion.

The UK benchmark had lost 2 percent last month and is down 37 percent for the year on fears of a severe global recession.

Energy stocks fell along with crude prices CLc1, which edged below $50 a barrel after OPEC decided to wait until mid-December to make another cut in output to try to defend sagging prices.

BP (BP.L), Royal Dutch Shell (RDSa.L), BG Group (BG.L) and Tullow Oil (TLW.L) shed between 5.3 and 8.6 percent.

Fears of slowing demand also hurt mining stocks, with Lonmin (LMI.L) sinking 18.3 percent, Vedanta Resources (VED.L) sliding 15.6 percent and Kazakhmys (KAZ.L) sagging 16.5 percent.

Xstrata (XTA.L) lost 12.5 percent after it suspended more ferrochrome production due to weak market conditions.

"Policymakers are now perhaps acknowledging the depth of this potential recession we are heading towards, if not in, and the historic level of challenges the economy are facing," said Tim Hughes, head of sales trading at IG Index.

"Then clearly the logical consequence is that is half point rate cut enough?"

"There is a lot of that kind of doom and gloom looking around and thinking what's there to be cheerful about. Retailers are ... adding to that housing woes and still tight credit situation."

Investors will eye interest rate decisions this week from both the Bank of England and the European Central Bank, with both expected to serve up further monetary policy easing on Thursday.

Banks were other standout fallers on the FTSE 100 as fears of the health of the sickly UK housing market added further pressure to the beleaguered sector.

House prices in England and Wales fell by 1.1 percent in November to take them 8.1 percent lower on a year ago, property consultancy Hometrack said in its monthly survey.  Continued...