By Sruthi Shankar and Bansari Mayur Kamdar

(Reuters) – Britain’s blue-chip index rose on Wednesday, as a jump in oil stocks and strong forecasts from heavyweights Reckitt Benckiser and Lloyds Banking Group overshadowed concerns over a slowing economy and soaring inflation.

The FTSE 100 index gained 0.6% and the domestically focussed midcap 250 edged 0.4% higher. Both the indexes looked set to end the month with strong gains.

Shares of Reckitt Benckiser climbed 2.8% to one-year highs as the maker of Dettol and Lysol cleaning products raised its full-year revenue forecast after steep price hikes helped it beat second-quarter sales expectations.

Lloyds Banking Group rose 4.1% after it raised its dividend and full-year profitability forecast as rising interest rates outpace modest growth in provisions for troubled loans.

“Expectations were a bit lower, so the headline figures for Llyods met expectations, helped by the fact that the rise in interest rates by the Bank of England is helping profit margins,” said David Madden, market analyst at Equiti Capital.

Adding to gains on the commodity-heavy FTSE 100, oil majors Shell and BP rose more than 1% each as crude prices climbed on a report of lower inventories in the United States and cuts in Russian gas flows to Europe. [O/R]

Meanwhile, better-than-expected results from U.S. tech giants Microsoft and Alphabet boosted Wall Street, with investors bracing for a big interest rate hike from the Federal Reserve later in the day. [.N]

“With so many moving parts to consider, we expect markets to remain volatile after the FOMC meeting,” Mark Haefele, chief investment officer of UBS Global Wealth Management wrote in a note.

Worries about aggressive monetary policy tightening and the energy crisis in Europe have raised fears of a potential recession. However, resilient defensive sectors such as healthcare and consumer staples and a weakening pound have aided the FTSE 100 this year.

Data released earlier showed shops and supermarkets in Britain increased prices by 4.4% in the 12 months to July, the largest rise since these records began in 2005, reflecting a jump in food and transport costs.

UK-listed shares of Rio Tinto slipped 0.7% after the global miner reported a 29% drop in first-half profit and more than halved its dividend.

Wizz Air jumped 10.4% to lead gains on the mid-cap index after the low-cost airline said it expected to deliver a material operating profit as revenue and pricing momentum continued to improve.

GRAPHIC: Rate-sensitive banks have outperformed FTSE 100 so far this year (https://fingfx.thomsonreuters.com/gfx/mkt/egvbkxxwwpq/BanksFTSE.PNG)

(Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru; Editing by Vinay Dwivedi, Subhranshu Sahu and David Evans)