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* FTSE 100 down 0.3%, FTSE 250 down 0.7%

* ONS data shows UK's economy stalled in January

* HSBC ( HSBC ) and Standard Chartered ( SCBFF ) hit by Middle East conflict

* Energy index rises as oil prices exceed $100 per barrel

By Tharuniyaa Lakshmi

March 13 (Reuters) - London's main stock indexes

extended declines on Friday, as the Middle East conflict

heightened inflation fears that clouded the Bank of England's

monetary policy outlook, while energy firms gained on higher oil

prices.

The blue-chip FTSE 100 was down 0.3% by 1058 GMT,

while the mid-cap FTSE 250 fell 0.7%. Both indexes were

on track for a second weekly loss.

They tracked movements in global markets, which slid as the

U.S.-Israel war on Iran neared two weeks and showed no signs of

de-escalation.

Markets are bracing for a drawn-out conflict, with U.S.

President Donald Trump escalating rhetoric against Iran, and

Tehran pledging to keep the Strait of Hormuz shut.

UK heavyweight energy index was up 1.3% with

oil majors BP and Shell up 1.5% and 1.3%,

respectively, as crude prices traded above $100 a barrel.

Most other sub-indexes were in the red, with miners

down 2.1%, making them the day's worst

performers.

Meanwhile, ONS data showed Britain's economy stalled in January,

with flat GDP, weak services and rising energy-price risks from

the Iran conflict, deepening investor worries.

"If the Strait of Hormuz re-opens by the end of March, the

economic fallout should be limited, but a prolonged closure and

persistently high energy prices pose the real risk," said

Jonathan Stubbs, analyst at Berenberg.

Money markets have erased hopes of a March rate cut from the

Bank of England, according to LSEG data.

BofA has pushed its expected first BoE rate cut to June due to

energy-driven inflation risks, joining Goldman Sachs ( GS ),

Standard Chartered ( SCBFF ) and Morgan Stanley ( MS ) in

delaying easing forecasts amid the Iran-linked surge in oil

prices.

"Needing to avoid a depreciation in the pound that makes

inflation worse, the Bank of England would likely shelve

interest rate cuts for the rest of the year," said Stubbs.

Among individual stocks, HSBC ( HSBC ) and Standard Chartered ( SCBFF )

fell 1% each as both are heavily invested in the Gulf's rise as

a global finance hub, and have seen operations disrupted as the

Iran conflict rattles their Middle East ambitions.