The FTSE 100 closed down 74.78 points at 6798.48 and the pound was at $1.35 against the dollar.
The blue chip index followed Asian markets into the red, as the UK government pondered introducing tighter restrictions to combat Covid-19.
Royal Mail announced that current director and former Apple executive, Simon Thompson, will become the firm’s new chief executive, while interim boss Stuart Simpson will leave the company by the end of this month.
The Federation of Small Businesses (FSB) warned that at least 250,000 small businesses across the UK are set to fold unless they are given more help to fight through the pandemic.
Airline Easyjet boosted its liquidity through a new five-year loan facility of £1.4billion, backed by a partial guarantee from Britain, helping to ease concerns about its finances as the pandemic continues to stop travel.