* FTSE 100 up 0.07%, FTSE 250 down 1%

* UK house prices fall 0.1% in May

By Niket Nishant and Tharuniyaa Lakshmi

June 5 (Reuters) - UK's FTSE 100 closed up on Friday,

bucking a risk-off mood in other global markets, as investors

took comfort from data suggesting that inflationary pressures

from the Middle East war may be less severe than feared.

The blue-chip FTSE 100 index closed up 0.07%, while

the mid-cap FTSE 250 fell 1%. Both indexes ended the

week lower, with the mid-cap index snapping a two-week winning

streak.

* British businesses expect to increase prices less quickly

in the year ahead than they did in April as some of the initial

energy price shock caused by the Iran war fades, a survey by the

Bank of England showed.

* The survey of more than 2,000 British companies showed 57%

of firms expected to increase prices in response to the energy

price shock, down 7 percentage points from April.

* "The latest evidence appears to support our view that the

weakness of the labour market will prevent the second-round

inflation effects that the Bank of England fears," said Paul

Dales, chief UK economist at Capital Economics. "If so, the Bank

of England might stand out from the central bank crowd by not

raising interest rates."

* An early resolution to the conflict and reopening of the

Strait of Hormuz, a key shipping route for global oil shipments,

would be essential to prevent further escalation of the economic

impact.

* Iran has made a ceasefire between Israel and Hezbollah a

condition for any peace deal with Washington to end the war, now

in its fourth month.

* British house prices unexpectedly fell 0.1% in May,

according to data from mortgage lender Halifax on Friday,

another sign of cooling in the market as higher borrowing costs

and uncertainty caused by the Iran war weigh on demand.

* Traders expect the BoE to keep borrowing costs unchanged

at 3.75% this month, but see one or possibly two quarter-point

hikes in rates later this year.

* Investors are also monitoring UK politics. Labour mayor

Andy Burnham signalled this week that if he wins a local

‌election later this month he would run in any leadership race

against ​Prime Minister Keir Starmer.

* Pharma stocks jumped 2.1% while personal

care stocks gained 2%. Precious metal miners

, on the other hand, fell 6%.

* Evoke rose 15% after the British bookmaker agreed

to be acquired by Greek lottery and gaming firm Bally's Intralot

on Friday in an all-share deal valuing it at about

£243 million ($326 million).

* Raspberry Pi was up 27% to the top of the mid-cap

index after the single-board computing firm upgraded its

full-year profit outlook, sending shares to an all-time high.