* FTSE 100 up 0.6%, FTSE 250 down 0.2%

* Close Brothers drops after Viceroy Research reveals

short position

* British consumer confidence hits lowest since last year

(Updates with closing levels)

March 16 (Reuters) - London's FTSE 100 rose on Monday as

falling oil prices lifted sentiment across stock markets, with

investors also keeping a close eye on the Bank of England's rate

decision due later this week.

The blue-chip FTSE 100 finished 0.6% higher after

starting the session on a steady note.

Sentiment improved after oil prices turned negative for the

day, easing around 1% after the U.S. said it would allow some

Iranian, Indian and Chinese ships to pass through the Strait of

Hormuz.

Talk of possible additional releases from emergency oil

reserves by member countries of the International Energy Agency,

as part of global efforts to bring down consumer energy prices

also helped ease concerns.

The U.S.-Israeli war on Iran, now in its third

week,continues to stoke turmoil across the Middle East and weigh

on global energy markets.

Energy sector rose 1.3%, despite the weakness

in oil prices. Oil major BP and Shell up more

than 1%.

Leading the gains on the blue-chip index, however, were

financial and consumer staples,

which rose over 1% each.

Britain's mid-cap index closed lower for the fourth

consecutive session, down 0.2%.

REIT sector advanced 1.4% with Segro ( SEGXF )

and Hammerson ( HMSNF ) rising 2.8% and 4.1%, respectively.

Morgan Stanley upgraded some European property companies

including Segro ( SEGXF ) and Hammerson ( HMSNF ) to overweight from equal-weight.

Investors' focus this week will be on interest rate

decisions in the UK, the U.S., and Europe, with central banks

holding their first full meetings since the start of the war and

widely expected to pause further rate cuts for now.

In an early sign of the potential impact of the conflict on

the economy, data showed that the British consumers have turned

their least confident since the start of last year following the

outbreak of the Middle East war.

Among other movers, Close Brothers tumbled 13.9%

after short seller Viceroy Research posted a report on its

website saying it was short the financial services firm.