* BP shares drop after Chair Albert Manifold ousted

* Progress in U.S.-Iran talks boosts investor sentiment

* HSBC ( HSBC ), Barclays ( BCS ), Lloyds lift FTSE 100

* FTSE 100 up 0.2%; FTSE 250 up 0.7%

(Updates to close)

May 26 (Reuters) - UK stocks climbed on Tuesday, with

the FTSE 250 touching a near three-month high on renewed

optimism over U.S.-Iran talks, while BP dropped after removing

Chair Albert Manifold.

The blue-chip FTSE 100 closed 0.2% higher at

10,491.39 points, touching a five-week high. The FTSE 250

climbed 0.7% to its highest since March 2 in its fourth

straight session of gains.

* BP shares dropped 4% after Chair Albert Manifold

was ousted with immediate effect, citing governance standards,

oversight and conduct issues, months after he took office to

help oversee a strategy revamp.

* U.S. and Iran signalled progress on a memorandum of

understanding that could halt conflict between the two nations

and restart shipping through the pivotal blockaded Strait of

Hormuz.

* However, U.S. strikes in southern Iran tempered some

enthusiasm that the deal was imminent.

* Major lenders HSBC ( HSBC ), Barclays ( BCS ) and Lloyds

were among the top boosts to FTSE 100, while Rio Tinto

and Glencore ( GLCNF ) rose 2% and 3%, respectively, as

metals prices firmed.

* The FTSE 100 index had ended a four-week losing streak on

Friday after softer economic data weakened expectations of a

Bank of England rate hike.

* However, the latest report showed British shop price

inflation sped up in May on the back of disruption and higher

energy costs caused by the war.

* Among individual stocks, Kingfisher rose nearly 4%

after the home improvement retailer maintained its full-year

profit outlook despite a drop in first-quarter underlying sales.

* Melrose Industries fell 5.3% after an overheating

chemical tank at its GKN Garden Grove facility in California

triggered an emergency response and evacuation orders over the

weekend.