UPDATE 2-UK economy weighs on Daily Mail ad sales, outlook

* Regional ad sales fall 12 percent in 11 weeks to March 20

* Medium-term outlook uncertain for UK consumer businesses

* Shares down 0.9 percent

(Adds details on digital businesses, shares, analyst comment)

By Georgina Prodhan

LONDON, March 28 (Reuters) - British newspaper group Daily Mail & General Trust reported an accelerating decline in regional advertising revenue as demand for recruitment ads fell sharply in a fragile UK economy.

Regional ad sales fell 12 percent in the 20 weeks to March 20, compared with a 6 percent decline in the company's financial first quarter to end-December. The company cut 7 percent of its staff in the five months to end-February.

DMGT said there was "continued uncertainty over medium-term outlook, particularly for B2C (business to consumer) businesses, given the external economic environment and fragile consumer confidence in the UK".

The group -- which owns Britain's top mid-market tabloid the Daily Mail, a variety of trade shows and business-to-business publications and services -- makes two-thirds of its sales in the UK.

Daily Mail shares fell 0.9 percent to 498.6 pence by 0734 GMT, and were one of the weakest performers in the European media index, which was flat.

"DMGT have released a relatively downbeat IMS this morning and we believe the shares could weaken today despite the 7 percent underperformance versus the sector/market in the past month," UBS analyst Alastair Reid wrote in a note.

For the five months to end February, B2B operations showed a 10 percent underlying increase in revenues, while national newspaper advertising rose 4 percent, slower than the 6 percent growth in the first quarter.

DMGT said first-half adjusted operating profit should show some improvement over last year, excluding exceptional costs of around 10 million pounds ($16 million) for the reorganisation of its regional media unit, which will bear the brunt of job cuts.

Advertising revenues from DMGT's digital-only businesses -- which include Mail Online, the world's most popular newspaper site -- rose 4 percent.

Daily Mail will hold a conference call for analysts at 0800 GMT and an investor presentation at 1300 GMT. ($1=.6243 Pound) (Editing by Erica Billingham and Jon Loades-Carter)