UK's FTSE 100 rises on energy, banks boost as investors await BoE decision?

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* FTSE 100 up 0.6%, FTSE 250 up 0.1%

* Oil prices jump 4% after Iranian strikes

* J.P. Morgan predicts BoE rate pause through 2026

* Close Brothers to cut 600 roles by fiscal 2027

March 17 (Reuters) - The UK's FTSE 100 inched higher on Tuesday on the back of gains in energy and heavyweight financials even as the conflict in the Middle East raged on, while investors awaited the Bank of England's interest rate decision this week.

The blue-chip FTSE 100 rose 0.6% by 1042 GMT, while the mid-cap FTSE 250 rose 0.1%.

Iran expanded its strikeson the UAE as the U.S.-Israel war with Tehran entered its third week, disrupting Gulf oil flows through the Strait of Hormuz. U.S. allies also refused President Donald Trump's request to help reopen the crucial waterway, sending oil prices 4% higher.

The energy sector rose 1.1%, trading at a record high. Majors BP and Shell advanced over 1% each, clawing back some ground lost on Monday.

Heavyweight banks gained 0.6%, while utilities followed with a 1.4% rise.

British borrowing costs dipped for a second day but remained well above levels seen before the Iran war, with markets now pricing roughly 50% odds of a Bank of England hike in November.

Investors' focus this week will be on interest rate decisions in the UK, the U.S., and Europe and comments from policymakers on how they intend to navigate the potential energy-driven inflationary pressures.

Most economists polled by Reuters abandoned their rate cut calls for March, now expecting a 25-basis-point cut in April or June. J.P. Morgan, however, expects the BoE to keep rates unchanged through 2026, with the next cut only in the first quarter of 2027.

Among individual stocks, Close Brothers fell 10.4% to the bottom of the mid-cap index after the lendersaid itwill cut 600 roles by fiscal 2027.

Trustpilot (TRTPF) jumped 23% after the global online review platform said it had quadrupled its annual profit. (Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Leroy Leo)