UPDATE 3-British banks lift FTSE 100 after BoE raises rates

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* BoE raises interest rates to 0.25% from 0.1%

* Boohoo drops after warning on FY outlook

* Domino's Pizza jumps on resolution with franchisees

* FTSE 100 up 1.3%, FTSE 250 adds 1.0%
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By Bansari Mayur Kamdar

Dec 16 (Reuters) - Shares in British banks rallied on
Thursday, lifting the blue-chip FTSE 100 after the Bank of
England stunned investors with an interest rate hike, the
world's first major central bank to do so since the pandemic hit
the global economy last year.

The FTSE 100 gained 1.3%, breaking a six-day slump,
while the banks index jumped 3.7% after the BoE
raised its main interest rate to 0.25% from 0.1% as it said
inflation was likely to hit 6% in April - three times its target
level.

Shares in Lloyds Banking Group, Barclays,
Standard Chartered and HSBC jumped between
3.8% and 4.6%, topping gains on the blue-chip index.

"The BoE raising rates just the day after the Fed opened the
door to market rate hikes next year is showing that even if we
have desynchronisation of monetary policy, we are all going in
the same direction," said Roland Kaloyan, head of European
equity at Societe Generale.

"The market doesn't like uncertainty and the fact that it
(BoE) is delivering now in line with expectations is quite
reassuring."

Sterling jumped as much as 0.8% against the U.S. dollar
, its highest since Nov. 30, and interest-rate sensitive
two-year gilt yields rose by more than 7 basis points on the day
to 0.56%, their highest since Dec. 1.

The European Central Bank cut stimulus further, while the
U.S. Federal Reserve on Wednesday accelerated the tapering of
its bond purchases programme, all pointing to a gradual
withdrawal of the copious stimulus that has supported the
pandemic-hit global economy.

Domino's Pizza Group jumped to the top of the
mid-cap FTSE 250 index after raising its medium-term
sales forecast and saying it had reached an agreement with its
franchisees over commercial terms for profit-sharing.

Online fashion retailer Boohoo plunged 23.1% after
warning that expectations for its 2021-22 year will be lower
than previously guided, blaming higher returns, delivery
disruptions and pandemic-related cost inflation.

(Reporting by Bansari Mayur Kamdar and Amal S in Bengaluru;
Editing by Sriraj Kalluvila, Devika Syamnath, Maju Samuel and
David Gregorio)