UPDATE 2-Progress in Brexit talks push London midcaps higher; Restaurant Group jumps

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* Restaurant Group climbs on improved sales numbers
* Premier Oil gains after reaching deal to merge with
Chrysaor
* UK to focus on jobs, not tax rises, for now - FM Rishi
Sunak
* FTSE 100 flat, FTSE 250 up 1.2%

(Updates to close)
By Shashank Nayar
Oct 6 (Reuters) - London's mid-cap index rose on Tuesday to
the highest in nearly three weeks after signs of progress in
Brexit talks boosted market sentiment while the FTSE 100 ended
flat as a stronger pound pressured the export-heavy index.
Britain and the EU are close to agreement on reciprocal
social security rights for their citizens after Brexit, two
diplomatic sources said, with one describing talks last week on
an elusive trade deal as "one of the most positive so
far". The FTSE 250 index .FTMC , viewed as a barometer for Brexit
sentiment, ended Tuesday's session 1.2% higher and gained for
the fourth session in five while the blue-chip index .FTSE
ended flat.
"Majority of the optimism comes from hopes of fresh U.S.
stimulus measures following President Trump's return to the
White House while news of positive developments on the Brexit
front also helped support investor sentiment," said Connor
Campbell, a financial analyst at SpreadEx.
A raft of stimulus measures and re-opening optimism have
helped the FTSE 100 bounce from its March lows.
However, rising economic stress due to a resurgence of
COVID-19 cases and a stronger pound have kept the index in a
tight range.
A UK hospitality sector trade body warned on more than half
a million job losses after the government's furlough scheme ends
this month as movement curbs continue to hurt the sector.
However, Britain's Finance Minister Rishi Sunak said he will
prioritise trying to save jobs over tax rises while the COVID-19
pandemic batters the economy. He also said the country cannot
sustain record public borrowings. Frankie and Benny's owner Restaurant Group RTN.L gained
4.5% after it unveiled improved like-for-like sales numbers for
the period since the start of July. Premier Oil PMO.L jumped 2.04% after it reached an
all-share merger deal with oil exploration and production
company Chrysaor.