The blue-chip FTSE 100 index ended 0.6 percent lower at 6,823.51 points after climbing to its highest since early June in the previous session. The index gained 1.6 percent last week, its best weekly performance since May.
But investors cut their equities trading positions on Monday after data showed German industrial output fell 1.8 percent on the month in May, the biggest drop in more than two years.
"The market appears to be in a consolidation phase as weaker-than-expected economic numbers from Germany have raised some concerns regarding the strength and sustainability of the recovery in Europe," HSBC equity strategist Robert Parkes said.
Miners featured among the top decliners, with weaker metals prices and concerns about global growth prompting investors to take some money off the table after a recent rally.
IMF chief Christine Lagarde said on Sunday that global economic activity should strengthen in the second half of the year and accelerate in 2015, but momentum could be weaker than expected, hinting at a slight cut in the Fund's growth forecasts.
"The IMF's comments are weighing on miners as investors are taking that as an excuse to take some profits after strong gains in recent days," IG analyst Chris Beauchamp said.
The UK mining index fell 0.6 percent. Other cyclical sectors also drew selling, with the UK banking index falling 0.8 percent and the mobile telecom index down 0.7 percent.
Despite the weakness in the broader market, analysts said the market pullback could prove to be short-lived.
Charles Stanley technical analyst Bill McNamara said that while the FTSE has been struggling to break above 6,900 points since the start of the year, it is still displaying strong upside momentum.
"The broader technical picture is suggesting that a test of the 1999 all-time (closing) high, at 6,930, might not be too far away now," he said.
Among individual stock movers, Tullow Oil fell 3.1 percent to the bottom of the FTSE 100 index, with traders attributing the share decline to fresh violence in Uganda that created uncertainty over Tullow's operations in the country.
Uganda's army said it had killed more than 60 gunmen who attacked police and army posts in the west on Saturday, while extra troops had been deployed to restore security in an area near the country's new oil fields.