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Updated at 1551 GMT

By Pranav Kashyap and Purvi Agarwal

May 22 (Reuters) -Britain's FTSE 100 closed at a two-week low on Wednesday after hotter-than-expected British inflation pushed back hopes of a June interest rate cut by the Bank of England, while upbeat corporate earnings kept declines in check.

The blue-chip FTSE 100 index .FTSE dropped 0.6%, set for its biggest drop in over a month. The mid cap FTSE 250 also shed 0.4%.

The pound GBP=D3 strengthened against the dollar, touching a two-month high and was last trading at 1.2728.

British consumer prices rose 2.3% in April, slowing from a 3.2% increase in March, while economists polled by Reuters expected a 2.1% rise.

Goldman Sachs, Morgan Stanley, and Barclays said on Wednesday that a June rate cut from the Bank of England seemed less likely, while money market participants are now pricing in 62% chances of the first cut in September. 0#BOEWATCH

"This print was quite disturbing. The market in the short term is reacting negatively to the delayed cuts," said Hani Redha, multi asset portfolio manager at PineBridge Investments.

Precious .FTNMX551030 and industrial metal miners .FTNMX551020 led declines with a 2.7% and 2.4% fall respectively, tracking a drop in gold and copper prices. GOL/ MET/L

Energy shares .FTNMX601010 also weighed heavily on the markets after oil prices fell over 1% on expectations that U.S. interest rates may stay high for longer. O/R

A Reuters survey showed on Wednesday that market participants are expecting Britain’s benchmark FTSE 100 .FTSE to fall 1.4% to 8,300 points by the end of 2024, and then rising to a new record of 9,300 by end-2025.

Markets were also anticipating an announcement on the next UK election, with several local media, citing sources, saying Prime Minister Rishi Sunak will call the vote for July 4.

Among stocks, Marks & Spencer MKS.L jumped 5.2% to the top of the FTSE 100, after the retailer reported a 58% rise in annual profit, beating market expectations.

Reporting by Pranav Kashyap in Bengaluru; Editing by Rashmi Aich and Alison Williams

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