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Updated at 1600 GMT

By Shubham Batra and Roshan Abraham

Aug 14 (Reuters) -London stocks ended higher after advancing for a fourth straight session on Wednesday as soft consumer prices data for July strengthened bets that the Bank of England will cut interest rates in its next policy meeting.

The blue-chip FTSE 100 .FTSE and the midcap FTSE 250 index .FTMC climbed 0.6% and 1%, respectively, and closed at a two-week high.

Most sectors closed with gains, with rate-sensitive sectors like homebuilders .FTNMX402020 gaining 3.4% and were amongst the biggest gainers.

Meanwhile, industrial metal miners .FTNMX551020 slipped nearly 1% as base metals were under pressure after a bigger-than-expected drop in Chinese lending worsened sentiment. MET/L

British consumer price inflation increased for the first time this year in July, official figures showed, but the rise was smaller than expected as services prices - closely watched by the Bank of England - rose less rapidly.

Money markets have raised their bets of BoE cutting rates next month. They now see a 40% chance of a 25-basis-point rate cut, up from a 36% possibility on Tuesday.

"Today's numbers should do nothing to dissuade the BoE from continuing to be on a rate cutting path," said Steve Sosnick, chief strategist at Interactive Brokers.

In the U.S., consumer prices rose moderately last month and the annual increase in inflation slowed to below 3% for the first time since early 2021, boosting odds of a U.S. rate cut in September.

"The Fed will do just whatever is necessary to keep the economy moving along steadily, while at the same time continuing to show progress on inflation," Sosnick said.

Among stocks, Flutter FLTRF.L jumped around 10.5% and saw its best day in eight months as the world's largest online betting company raised its full-year outlook after a much better-than-expected second quarter.

Playtech PTEC.L jumped 13.7% to the top of the mid-cap index after Flutter entered talks to buy the gambling technology firm's Italian unit Snaitech.

Reporting by Shubham Batra and Roshan Abraham in Bengaluru; Editing by Eileen Soreng and Jonathan Oatis

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