* FTSE 100 down 0.4%, FTSE 250 down 0.9%

* RICS survey shows UK housing market slowdown

* Bank of England seen holding rates in March

* HSBC ( HSBC ) closed all Qatar branches amid Middle East war

(Updates to market close)

By Tharuniyaa Lakshmi

March 12 (Reuters) - UK stocks closed lower for a second

straight day on Thursday after Iran stepped up attacks on oil

and transport facilities across the Middle East,driving a surge

in crude prices that stoked concerns about rising inflationary

pressures.

The blue-chip FTSE 100 closed down 0.4%, while the

mid-cap FTSE 250 fell 0.9%.

Oil prices climbed back to $100 after Iranian

boats appeared to have attacked two fuel tankers in Iraqi waters

and the country's supreme leader said the closure of the vital

Strait of Hormuz should continue.

The FTSE 350 energy index jumped 2.6% to a

record high as crude prices gained almost 9%.

Britain is seen as more exposed than many other Western

countries to an energy price shock due to its stretched public

finances and its heavy reliance on imported gas.

"The longer the disruption goes on, the greater the impact

on energy prices and in turn global inflation. This then has

implications for interest rates too," said Danni Hewson, head of

financial analysis at AJ Bell.

Money markets have abandoned expectations of early Bank of

England easing, with futures no longer pricing in a March cut,

instead seeing a roughly 40% chance of a quarter-point rise in

borrowing costs in December.

A survey from RICS showed Britain's housing market has lost

steam as demand faded from buyers concerned about the

implications of the Middle East conflict and possible increases

in mortgage rates on the back of energy price rises.

Banks were among the worst-hit sectors in Europe as

investors feared a hit to the economy from inflationary

pressures. An index of UK banks dropped 4.8%.

HSBC ( HSBC ) this week closed its Qatar branches while

Standard Chartered ( SCBFF ) evacuated its Dubai office and told

staff there to work from home, in a sign of how the conflict has

rattled their day-to-day activities.

TP ICAP rose 10.7% to the top of the mid-cap index

after the inter-dealer broker posted a 3.6% rise in annual

pre-tax profit.