UPDATE 2-London stocks rise on hopes of Brexit trade deal

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* UK says Brexit talks situation with EU unchanged
* BoE could step up spending next month - Reuters poll
* Britvic jumps on higher profit outlook
* FTSE 100 up 0.1%, FTSE 250 adds 0.4%,

(Adds comment; updates to close)
By Devik Jain
Oct 20 (Reuters) - London stocks closed higher on Tuesday as
investors remained hopeful of a trade deal with the European
Union by year-end, although gains were capped by concerns over
tougher coronavirus lockdowns in parts of England.
The blue-chip FTSE 100 .FTSE closed 0.1% up, led by
personal goods makers .FTNMX3760 , food and drug retailers
.FTNMX5330 , real estate investment trusts .FTNMX8670 and
travel and leisure stocks .FTNMX5750 .
The domestically focused mid-cap FTSE 250 ended 0.4% higher,
boosted by soft drinks maker Britvic Plc BVIC.L , which jumped
6.4% as it forecast annual adjusted operating profit ahead of
market expectations. Britain said the situation regarding trade talks with the EU
remained unchanged, as both sides exhorted the other on Tuesday
to compromise to avoid a fast-approaching disruptive finale to
the five-year Brexit drama that would add to the economic pain
from the coronavirus crisis. "There's a lot of wrangling and political posturing but
traders are not too scared as it's all part of the process to
get a deal," said Stefan Koopman, senior market economist at
Rabobank.
"The market is still pricing that a deal will happen and so
we have to suffer through this as the waiting game continues and
time clearly is not limited."
New business restrictions due to surging COVID-19 infections
and a stalemate over Brexit have pressured UK markets this
month, with analysts also warning of a further slowdown in
domestic economic growth.
A recent Reuters poll found the Bank of England was likely
to supplement its quantitative easing war chest next month to
offer more support to a faltering recovery. In company news, airlines group IAG ICAG.L rose 6.9% as
rapid outbound COVID-19 testing for passengers was launched at
London's Heathrow Airport in an effort to re-open restricted
routes and boost traffic for airlines. Bellway Plc BWY.L fell 3.7% after the homebuilder reported
a 64.3% drop in annual pretax profit. Petra Diamonds Ltd PDL.L tumbled 17% after the diamond
miner abandoned plans to sell the business in favour of a
debt-for-equity restructuring.