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* Risk to Britain's economy on the downside- BoE Governor
* Government mulls fresh lockdowns in northern England
* Hargreaves Lansdown drops on weak outlook
* FTSE 100 up 0.5%, FTSE 250 gains 0.8%
(Updates to close)
By Shashank Nayar
Oct 8 (Reuters) - British shares rose on Thursday after the
Bank of England Governor said he thought a post-Brexit trade
deal was possible and hinted at additional stimulus as rising
numbers of coronavirus cases lead to fresh restrictions.
Bank of England Governor Andrew Bailey said on Thursday that
risks to Britain's economy were "very much on the downside" and
that the central bank was ready to use its policy firepower to
limit the impact of a second wave of COVID-19 cases.
The blue-chip index rose 0.5% to close near a
one-month high with oil stocks leading gains as
crude prices jumped on hopes of some U.S. coronavirus relief
aid.
The Governor also said that Britain and the European Union
should be able to reach a trade deal.
The mid-cap index, considered a barometer for Brexit
sentiment, rose to a two-month high and closed up 0.8%.
"With hopes of some support from the U.S. and with the pound
going up, it has given the market an idea of some positive
developments on the Brexit front, which also helped mid-caps
gain as they are better geared towards Brexit news," said Chris
Bailey, a strategist at Raymond James.
Gains were capped, however, by a government minister saying
additional local COVID-19 restrictions for parts of northern
England were being considered as the second wave of the novel
coronavirus accelerates.
In an earnings-heavy day, Ladbrokes and bwin owner GVC
Holdings pared early gains to close up 0.7% at a
two-year high after it raised its outlook for annual core
earnings on the back of a 12% rise in third quarter revenue.
British tobacco company Imperial Brands fell 0.3%
after forecasting its full-year net revenue would be broadly
flat and in line with market estimates.
Fund supermarket Hargreaves Lansdown dropped 4.7%
after warning of weakening investor sentiment arising from
COVID-19 and Brexit uncertainties.
(Reporting by Shashank Nayar in Bengaluru; editing by
Uttaresh.V, Kirsten Donovan)
