UPDATE 2-UK mid-caps hit two-month high on stimulus hopes

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* IHG jumps on saying "very early" return in demand
* Global equities shrug off U.S.-China tensions
* BoE deputy governor signals room for more stimulus
* Housebuilder Bellway , Domino's Pizza slip on weak earnings
* FTSE 100 up 1.6%, FTSE 250 up 1.5%

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By Sagarika Jaisinghani and Shreyashi Sanyal
Aug 11 (Reuters) - The UK mid-caps index touched its highest
level in two months on Tuesday as hopes of a stimulus-led
rebound helped investors look past a mixed batch of quarterly
earnings updates, while InterContinental Hotels rose after
signalling a tentative recovery.
The Holiday Inn owner IHG.L gained 4.7% after it said it
was seeing some "very early" signs of returning demand as
coronavirus-related restrictions eased in major markets.
The mid-cap FTSE 250 .FTMC rose for a third straight
session, as Bank of England Deputy Governor Dave Ramsden said
the central bank would step up quantitative easing if the
economy slowed again. June gross domestic product figures are
due on Wednesday. The blue-chip FTSE 100 .FTSE added 1.6%, tracking gains in
Asia and on Wall Street on relief that a U.S.-China spat
appeared not to have spilled over into trade. MKTS/GLOB
"Hopes of bipartisan agreement on a U.S. fiscal stimulus
package helped stoke the fires of a market rally on Tuesday with
the FTSE 100 now up 4% since the start of August and back firmly
above 6,100," said Russ Mould, investment director at AJ Bell.
Historic global stimulus and improving economic data have
powered UK stock markets since a coronavirus-driven crash in
March. Data on Tuesday showed British consumers spent the most
in July since a coronavirus-led lockdown in March, as pubs,
restaurants, barbers and beauty salons reopened.
Still, investors are cautious with unemployment remaining
elevated and a resurgence in COVID-19 cases threatening another
round of lockdowns, and the FTSE 100 has underperformed its
European and U.S. peers. Energy .FTNMX0530 , life insurance .FTNMX8570 and
travel-related .FTNMX5750 stocks were among the top gainers of
the day, while homebuilders .FTNMX3720 , utilities .FTNMX7570
and real estate .FTUB8600 firms lagged the wider market.
Housebuilder Bellway Plc BWY.L fell 4.5% as it built fewer
homes in the year due to the lockdown.