By Reuters

(Reuters) - UK shares edged higher on Thursday, supported by gains in energy stocks and positive corporate updates from firms, including Rentokil and Entain, while investors assessed ​the implications of the U.S.-Iran war entering its sixth day.

The blue-chip FTSE 100 ​index (.FTSE) firmed 0.1% by 1201 GMT, while the FTSE 250 midcap index ⁠added 0.4%.

British equities continue to contend with the prospect of fewer interest rate ​cuts this year after the escalating conflict in the Middle East lifted oil prices and ​reinforced expectations of higher global inflation. Those concerns have pulled the FTSE 100 about 2.7% below the record high it reached on Friday.

Money market pricing now suggests only one quarter-point rate reduction by ​the Bank of England this year, compared with expectations for two cuts at the ​end of February. Traders assign a 75% probability that the central bank will leave interest rates unchanged ‌at ⁠its meeting later this month.

Domestic economic data this week has been mixed. Activity in Britain's construction sector contracted for the 14th month in a row in February, a contrast with a more upbeat picture in the services PMI.

A separate BoE survey showed UK employers' ​expectations for wage growth held ​at their joint-lowest in ⁠nearly four years in February.

Rentokil (RTO.L) jumped 13% to lead the FTSE 100 after the pest control firm reported a rise in ​annual adjusted pretax profit, while Entain (ENT.L) gained 5.4% as the Ladbrokes-owner posted ​slightly better-than-expected ⁠annual profit.

Grafton (GFTU_u.L) gained 3.6% after the construction products distributor beat full-year adjusted operating profit and announced a new 25 million pound share buyback plan.

Energy giants Shell (SHEL.L) and (BP.L) gained about 1% each ⁠on ​the back of higher oil prices, boosting the UK ​benchmark index.

On the downside, Reckitt (RKT.L) slipped about 6% after the maker of Durex condoms said it expected the challenging ​trading environment in Europe to continue.

Reporting by Medha Singh in Bengaluru; Editing by Vijay Kishore

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