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* FTSE 100 down 0.1%, FTSE 250 up 0.2%

* Both indexes on track to third straight weekly decline

* BoE hints at potential rate hikes amid inflation

concerns

* Unilever ( UL ) in talks to sell foods business to McCormick ( MKC )

March 20 (Reuters) - London's FTSE100 marginally fell on

Friday, set for a third consecutive weekly decline, as the

escalating Middle East war and surging oil prices deepened

inflation fears and cemented expectations for the Bank of

England to hike interest rates.

The blue-chip FTSE 100 fell 0.1% by 1039 GMT, while

the mid-cap FTSE 250 was up 0.2%.

Both indexes swung between losses and gains through the

session, reflecting the choppy and uncertain mood across

markets.

Oil prices nudged higher on Friday despite leading European

nations, Japan and Canada offering to join efforts to secure

safe passage for ships through the Strait of Hormuz, and the

U.S. outlining moves to boost supply.

UK's energy stocks slipped 0.9%, but was

still around record-high levels.

Heavyweight pharma stocks fell 0.3%.

The BoE held rates at 3.75% at Thursday's policy meeting. Its

warning that inflation posed a bigger risk than slowing growth

pushed traders to price in a roughly 60% chance of a

25-basis-point hike by April and potentially up to three

quarter-point increases by year-end.

Fresh fiscal concerns rose after Britain borrowed far more than

expected in February, partly due to volatile debt-interest

payments, just as the Iran conflict drove up funding costs and

fuelled calls for higher public spending.

Among other movers, Unilever ( UL ) shares inched 0.9% up

after the consumer goods giant confirmed it was in talks with

U.S.-based McCormick & Company ( MKC ) about selling its foods

business.

Smiths Group ( SMGKF ) dropped 7.9% after the engineering group

missed half-year organic revenue forecasts.

JD Wetherspoon fell 12.3% after the pub chain said that

its full-year profits may fall below market estimates after

higher energy costs and wage-related taxes dragged first-half

profit down by 37%.