UPDATE 2-FTSE 100 gains on oil, mining stock boost; Asos drops on profit warning

(For a Reuters live blog on U.S., UK and European stock
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* Asos tumbles on 2022 profit warning; CEO steps down

* BoE hints at "significantly earlier" rate hikes

* Oil stocks jump to March 2020 highs

* FTSE 100 up 0.7%, FTSE 250 off 0.2%
(Updates to close)

By Shashank Nayar and Bansari Mayur Kamdar

Oct 11 (Reuters) - UK's FTSE 100 climbed on Monday, helped
by heavyweight mining and energy stocks, while a stronger pound
on the back of rising inflation and interest rate hike bets
limited further gains.

Inflation is back on the investor radar after Bank of
England (BoE) policymaker Michael Saunders told households to
get ready for "significantly earlier" interest rate rises, and
Governor Andrew Bailey said above-target inflation was
concerning.

Stuart Cole, head of macroeconomics at Equiti Capital, said
the problem that policymakers were facing was that the sources
of inflation that had previously seemed temporary were becoming
sustainable.

The blue-chip FTSE 100 index ended 0.7% higher and
recorded its third consecutive session of rises, with Royal
Dutch Shell, BP, Anglo American, and Rio
Tinto among the top gainers.

The pound strengthened 0.2%, limiting gains in the
export-focussed FTSE 100.

Banks added more than 2.2% as bond yields
jumped across the curve after Bailey said he was concerned about
inflation shooting past the BoE's 2% target. The benchmark
10-year bond yield jumped to its highest since May 2019.

The FTSE 100 has risen about 10% so far this year on easy
central bank policies and re-opening optimism, but the pace of
gains has slowed recently as investors straddle the fence
between rising inflation and rate hike pressures and steady
gains in mining and energy stocks on strong commodity prices.

Oil stocks, which have gained about 37% this
year, hit their highest level since March last year to recoup
most of the pandemic-driven losses. Mining stocks
marked their best session since July.

Meanwhile, the domestically focused mid-cap index
dropped 0.2%, with consumer discretionary stocks among the worst
performers.

Online clothing store ASOS fell 13.4%, hitting a
17-month low, after it parted company with Chief Executive
Officer Nick Beighton and warned that higher logistics costs and
supply chain disruption could force 2022 profits to drop by more
than 40%.
(Reporting by Bansari Mayur Kamdar and Amal S; Editing by
Subhranshu Sahu and Andrew Heavens)