Nov. 11 (Bloomberg) -- U.K. stocks dropped for the first time in three days after reports showed home sales fell to the lowest in more than 30 years and consumer spending slowed.

BHP Billiton Ltd. and Rio Tinto Group retreated more than 8 percent as metal prices declined. InterContinental Hotels Group Plc lost 7.6 percent after saying there was a ``sharp deterioration'' in the lodging market.

U.K. home sales declined to the lowest level in at least three decades as the lending freeze pushed down prices for a 15th month, the Royal Institution of Chartered Surveyors said. Retail sales fell an annual 2.2 percent in October, the first drop since April 2005, the British Retail Consortium said in a separate report today.

``The market sentiment is against us today,'' said David Buik, a market analyst at BGC Partners in London. ``People are really in fear,'' he told Bloomberg Television.

The benchmark FTSE 100 Index retreated 157.23, or 3.6 percent, to 4,246.69 as all but six stocks dropped. The index has lost 34 percent this year, heading for its worst year on record. The FTSE All-Share Index slid 3.3 percent today and Ireland's ISEQ Index fell 1.8 percent, as declines were limited by a 4 percent increase by CRH Plc.

More than $28 trillion has been erased from the value of global equity markets this year as credit losses and writedowns totaled $690 billion in the worst financial crisis since the Great Depression.

GDP Forecast Cut

Morgan Stanley reduced its 2009 gross domestic product forecast for the U.K. to a contraction of 0.3 percent from zero percent growth. The international Monetary Fund last week predicted the economies of the U.S., Japan and the euro zone will all shrink next year.

BHP Billiton, the world's largest mining company, slid 9.3 percent to 1,019 pence. Rio Tinto, the third biggest, lost 8.9 percent to 2,592 pence. Both stocks soared yesterday on China's planned stimulus package to shore up economic growth in the world's fourth-largest economy.

Copper lost 5.6 percent in London and lead, nickel, tin and zinc declined on concern the slowing global economy would damp demand for raw materials and extend rising stockpiles.

InterContinental Hotels, the owner of the Crowne Plaza lodging brand, lost 7.6 percent to 499 pence after reporting a drop in third-quarter profit as sales in October slowed.

Taylor Wimpey Plc, battling to survive the biggest homebuilding slump in 25 years, tumbled 13 percent to 11.5 pence after saying orders have fallen 40 percent as it continues to negotiate new loan conditions with lenders.

Vodafone Group Plc added 6.2 percent to 115 pence. The world's largest mobile-phone company today said it aims to cut costs to protect earnings amid falling demand.

CRH added 3.5 percent to 17.19 euros. The world's second- biggest building materials maker said there's significant political momentum in the U.S. Congress for a fiscal stimulus package that would benefit demand for building materials.

The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.

Cookson Group Plc (CKSN LN) tumbled 42 pence, or 24 percent, to 130. The world's biggest maker of molds for steelmakers said it will miss its targets as metal makers cut production to counter slowing demand.

Yell Group Plc (YELL LN) added 3.25 pence, or 5 percent, to 68.75. The publisher of the U.K.'s Yellow Pages phone directory said it will cut about 1,300 more jobs to counter falling revenue and save 100 million pounds ($156 million).

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

Last Updated: November 11, 2008 11:58 EST