UPDATE 2-Drugmakers help lift British blue-chip index to best day in almost 3 months

* Drop in pound benefits resource exporters

* Primark-owner AB Foods rises on upbeat forecast

* FTSE 100 still well off pre-pandemic highs
(Adds details, updates to market close)

By Sagarika Jaisinghani and Ambar Warrick

Sept 7 (Reuters) - Britain's blue-chip FTSE 100 index
bounced off a near four-month low on Monday as Astrazeneca and
GlaxoSmithKline rose on news about their respective COVID-19
vaccines, while a weaker pound helped exporters.

The FTSE 100 ended 2.4% higher after a three-week
losing streak, with Astrazeneca's stock move providing
the biggest boost to the index as the British drugmaker struck a
deal with Australia's CSL to manufacture its
coronavirus vaccine.

Meanwhile, GlaxoSmithKline also rose on new details
on the pricing of its vaccine.

Britain's domestically-focussed FTSE 250 rose for
the first time in three sessions, up 1.7%, after a
U.S.-technology rout spread into other sectors last week.

Still, trading volumes were muted on account of a U.S.
market holiday.

British stocks sank further from pre-pandemic highs last
week, as doubts persisted over an economic recovery.

The pound fell sharply after Britain warned the
European Union that it could effectively override the divorce
deal it signed unless the bloc agrees to a free trade deal by
Oct. 15.

"The probability of a deal seems to be reducing with state
aid the surprising current sticking point ... This has certainly
raised the stakes at a fraught time in talks," Deutsche Bank
strategist Jim Reid said.

The sterling's weakness helped major resource exporters,
with BP and Rio Tinto among the other stocks
whose weightings on the FTSE 100 helped lift the index.

Shares of homebuilders jumped 2.3% after data
showed British house prices hit a record high in August, adding
to signs of a post-lockdown housing market boom.

And Associated British Foods rose 0.5% after saying
trading in its latest quarter exceeded expectations.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Subhranshu Sahu and Alexander Smith)