(For a Reuters live blog on U.S., UK and European stock markets,

click or type LIVE/ in a news window)

April 1 (Reuters) - London's main indexes climbed on

Wednesday after U.S. President Donald Trump signalled that the

Iran war could end soon, prompting investors to scale back

expectations for further interest rate hikes by the Bank of

England.

The blue-chip FTSE 100 rose 1.6% at 1044 GMT, while

the midcap FTSE 250 climbed 1.8%. On Tuesday, both

indexes marked their biggest monthly drop since 2020 on fears

that the war-led increase in oil prices will stoke inflation.

* Trump and his Secretary of State Marco Rubio said the end

of the war on Iran could be near, with Washington signalling

potential for both direct talks with Tehran's leadership and a

winding down of the conflict even without a deal.

* Interest rate futures were fully pricing in one 25

basis-point increase in the BoE's bank rate by the end of 2026,

and the possibility of a second compared with two or three

hikes.

* Most FTSE 350 sub-sectors traded higher, except energy

, which fell 1% after oil slid more than 3% amid

Middle East volatility.

* Heavyweight banks rose 3.4%, providing the

biggest boost to the benchmark index, with Standard Chartered ( SCBFF )

, Lloyds Banking Group ( LYG ) and Barclays ( BCS ) up

between 3.4% and 4.1%.

* Precious metal miners rose 4.7%, as gold

rose on de-escalation hopes.

* Britain's food prices will be rising by almost 10% by the

end of 2026 due to the Iran war, the country's food and drink

manufacturers' lobby warned, around three times faster than its

previous forecast.

* British factory cost pressures soared in March, and

delivery delays - due to ships avoiding the Strait of Hormuz -

were the longest since mid-2022, according to an S&P Global

survey.

* Berkeley fell 15.1% after the home builder

forecast that profit growth would slow through 2030. The firm

said it would halt land purchases as the war and the risk of

higher interest rates dampen hopes of a housing market recovery.