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* FTSE 100 down, FTSE 250 down

* Oil and defence stocks climb

* Airlines, hotels and banks slide

March 2 (Reuters) - UK stock indexes fell on Monday,

swept up in a global selloff, as an escalatingmilitary conflict

in the Middle East sparked a jump in oil prices and pushed

investors towards safe-haven assets.

Oil prices surged almost 8% after retaliatory

Iranian attacks disrupted shipping in the crucial Strait of

Hormuz following the weekend's bombing by Israel and the United

States that killed Iranian Supreme Leader Ayatollah Ali

Khamenei.

While British oil majors such as Shell rose 2% and

defence companies like BAE Systems climbed 4.9%, other

equity sectors, particularly banks and travel companies, came

under heavy selling pressure as investors braced for travel and

economic disruptions.

The blue-chip FTSE 100 fell 1% by 1131 GMT, having

touched a record high in the prior session, while the

domestically oriented FTSE 250 index tumbled 1.3%.

"If the issues persist, then the market will start to worry

about new inflationary pressures and that could lower

expectations for near-term interest rate cuts," said Dan

Coatsworth, head of markets at AJ Bell.

Heavyweight banks, including HSBC ( HSBC ), Barclays ( BCS )

and Lloyds Banking Group ( LYG ) fell between 2.7% and

4.7%, as surging oil prices fuelled concerns about a resurgence

of inflation.

British government bond yields rose as investors trimmed

their expectations for Bank of England interest rate cuts.

Traders were pricing in a 74% chance that the BoE will cut rates

later this month, down from about 78% last week.

British Airways operator IAG fell 5.8% after the

airlinesaid on Saturday it had cancelled flights to Tel Aviv and

Bahrain until March 3. The broader FTSE 350 travel & leisure

index fell 4.6%, with hotels and cruise operators

among the major decliners.

Senior, which supplies components to aircraft

manufacturers, including Boeing ( BA ) and Airbus, fell

3.7% despite reporting upbeat results.