UPDATE 2-FTSE 100 suffers worst day in two months on poor earnings reports

* FTSE 100 down 0.8%, FTSE 250 down 0.6%
* St. James's Place, Lloyds slump after results
* Next surges after target hike
* Housebuilders down after Taylor Wimpey warns on margins
* Intu, Aston Martin skid on mid-caps

(Adds company news items, updates to closing prices)
By Shashwat Awasthi and Muvija M
July 31 (Reuters) - London's FTSE 100 slipped on Wednesday
from this week's 11-month high, as wealth manager St. James's
Place, homebuilder Taylor Wimpey and mortgage lender Lloyds fell
on the back of results, overshadowing an upbeat forecast from
clothing retailer Next.
The main index .FTSE lost 0.8%, its biggest one-day drop
in two months, as exporter stocks also weighed after the pound
recovered from a 28-month low.
The mid-cap FTSE 250 .FTMC fell 0.6% with losses led by
mall operator Intu INTUP.L and carmaker Aston Martin AML.L
following results.
The indexes underperformed their European and U.S.
counterparts, which were supported by strong earnings readings
from lenders BNP Paribas BNPP.PA and Credit Suisse CSGN.S ,
as well as tech giant Apple AAPL.O , ahead of a much-awaited
U.S. Federal Reserve interest rate decision.
Wealth manager St. James's Place SJP.L fell 5.6% on its
worst day in more than three years after it missed forecasts for
operating profit, as weaker client sentiment weighed on inflows
of new money in the first half of the year. Housebuilders .FTNMX3720 , already under pressure due to
heightened worries about a no-deal Brexit under new Prime
Minister Boris Johnson, skidded nearly 2% after Taylor Wimpey
TW.L forecast a fall in annual margins. Taylor Wimpey shares
slumped 8.4%.
Lloyds Banking Group LLOY.L , Britain's biggest mortgage
lender, slipped 3.1% after a further charge to meet claims for
mis-sold insurance to consumers hit its earnings. "The picture for Q2 was always likely to be much more tricky
given that the UK economy slowed quite significantly during
April and May, in the wake of the extension of the Brexit
deadline at the end of March," CMC Markets analyst Michael
Hewson wrote.
Despite the session's losses, the blue-chip index is set to
post its second straight month of gains, mainly due to hopes
among investors that the U.S. Federal Reserve and other central
banks will cut interest rates.
"We also have to wonder just how much the Fed can deliver
for the market now that so much is already expected of it,"
Markets.com analyst Neil Wilson said.
The Fed is widely expected to pull the trigger on a 25 basis
points rate cut later on Wednesday with future sentiment heavily
relying on whether the central bank of the world's biggest
economy hints at any future policy easing.
The FTSE 100's losses were kept in check by retailer Next
NXT.L , which jumped 8% to a more than one-year high after it
raised its full-year sales and profit targets. Among midcaps, Intu, whose shares have plummeted this year
as it scrapped its dividend and changed management in the wake
of failed takeover bids, lost nearly one third of its value
after reporting a fall in first-half net rental income. The
stock closed at a record low. Aston Martin, whose shares debuted on the London markets
last year, plunged 12.3% after posting a half-year loss.