(Updates after markets close)

* FTSE 100 up 1.2%, FTSE 250 up 0.7%

* Midcap FTSE 250 hits highest close in over four years

* Segro ( SEGXF ) rises after Prologis' ( PLD ) final takeover proposal

* J D Wetherspoon ( JDWPF ) falls after profit warning

By Tharuniyaa Lakshmi and Shashwat Chauhan

July 22 (Reuters) - London's FTSE 100 rose over 1% in

broad-based gains on Wednesday with commodity-linked stocks

among top gainers as oil and metal prices climbed, though focus

was on the Bank of England's rate hike trajectory and simmering

Middle East tensions.

The blue-chip FTSE 100 index closed 1.2% higher at

10,717 points, briefly hitting its highest in over four months.

The midcap FTSE 250 climbed 0.7%, clocking its highest

closing level in over four years.

* Precious metal miners jumped 4.5% to lead

sector gains, as gold prices advanced to a two-week high.

Industrial metal miners also gained 1.9%.

* Heavyweight energy gained 1.4%, tracking a

more than 3% jump in oil prices on mounting concerns that

escalating U.S.-Iran hostilities and threats by Yemen's

Iran-backed Houthi militia will disrupt key supply routes.

* British banks added 1.7%, with HSBC ( HSBC )

- the UK's most valuable company - climbing 2.1%.

* British inflation cooled more than expected last month as

a U.S.-Iran de-escalation reduced fuel prices, but the relief is

likely temporary for new Prime Minister Andy Burnham, who seeks

to ease living costs.

* "The Monetary Policy Committee (MPC) will note that

today's headline drop compares with the Bank's own 3.1% forecast

for June. This is seen as a welcome relief from the uncertainty

surrounding the extent to which rising energy prices

might penetrate higher prices and wages," said Jeremy

Batstone-Carr, European Strategist, Raymond James Wealth

Management.

* The Bank of England is scheduled to meet next week with

money market traders widely expecting the central bank to hold

its lending rate steady. Traders currently see at least one

25-bps rate hike by December and a 72% chance of another

increase.

* Among stocks, Segro ( SEGXF ) rose 2.9% after U.S. firm

Prologis ( PLD ) submitted a final takeover proposal for the

warehouse landlord.

* J D Wetherspoon ( JDWPF ) fell 4.2% after the British pub

chain warned that annual earnings would likely miss expectations

due to weaker sales and rising costs.

* Shares of low-cost airline easyJet dropped 11.8%

after Reuters reported the European Union is preparing a review

of airline ownership rules, a move that could complicate U.S.

bids for the company.