UPDATE 1-Chicago Fed President sees U.S. growth in H2

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LONDON, July 1 (Reuters) - Chicago Federal Reserve President Charles Evans said on Wednesday he expected the U.S. economy to grow in the second half of this year and was looking for 2.5 to 3 percent growth in 2010.

Evans, speaking at an event in London, said the main concern at the moment was rising unemployment while on prices the concern, if anything, was more on disinflationary pressures.

"I'm looking for positive growth in the second half, not strong growth, but positive growth. And then 2010 somewhat better growth. 2.5-3.0 percent growth in 2010," he told reporters after a speech to the European Economics and Financial Centre.

Evans said there was no particular timeframe for exit strategies from the programmes to revive the economy and the Federal Reserve's near zero interest rate policy.

"We need to be thinking about how the balance sheet will evolve and that's why the discussion of exit strategies. But it's not about any particular timeframe."

"At the moment the concern is that unemployment is rising and if anything there is more disinflationary pressures."

Evans said there was an "extraordinary diversity" of views on inflation but he preferred to take the middle ground.

"It's quite easy for people to express concerns about inflation because of the size of our balance sheet. It's also quite easy to hear the viewpoints that with the unemployment rate headed up as high and even higher in the United States ... that there is resource slack that will provide disinflationary forces," he said.

"My own view is that I prefer to take more of a middle view on inflation and I have my inflation outlook falling a bit from where it is now. But that's uncomfortably in the middle relative to the mass either side of that."

When asked if he agreed with San Francisco Fed President Janet Yellen that interest rates might not rise for a couple of years, he declined comment.

Markets have been signalling a possible increase in the Fed fund rate by the end of the year.

He also welcomed the progress made under the Federal Reserve's Term Asset-Backed Securities Loan Facility aimed at unclogging consumer lending and reopen the securitisation markets.

"I'm very pleased to see that in issuance of ABS there has been TALF but also non-TALF participation, institutional investors are coming in ... It's returning to more normal funding," he said. (Reporting by Emelia Sithole-Mataris and Nigel Davies; Writing by Ruth Pitchford)