FTSE up 0.4 percent after BoE inflation report

* Banks recover after BoE inflation report

* Energy stocks firmer as crude stabilises

* Miners mixed awaiting FOMC outcome

By Tricia Wright

LONDON, Aug 12 (Reuters) - Britain's top share index rose in midday trade on Wednesday, as the market breathed a sigh of relief after the Bank of England's inflation report, with energy and banking stocks among the biggest blue-chip gainers.

By 1105 GMT, the FTSE 100 .FTSE index was up 19.67 points, or 0.4 percent, at 4,691.01, after closing down 1.1 percent on Tuesday, its biggest fall in a fortnight after hitting 2009 highs on Friday.

British inflation will be well below the 2 percent target in two years if interest rates rise in the first quarter, the Bank of England said, suggesting markets are pricing in rate hikes too early. [ID:nBOE001993]

British unemployment hit its highest rate since 1996 in the three months to June, official figures showed, while the number of people claiming jobless benefit rose broadly as expected in July. [ID:nLC524325]

Banks were among the top blue-chip risers, rebounding after falls earlier in the session, as investors' attention shifted away from ongoing fears of potential cash calls in the sector to positive noises from the inflation report.

Lloyds Banking Group (LLOY.L) was the best off, up 5.4 percent, while Royal Bank of Scotland (RBS.L), Standard Chartered (STAN.L) and Barclays (BARC.L) rose 0.2 to 5.2 percent.

"I suspect that the fact that (BoE governor) King has said there continues to be scope to change his policy if necessary may well be playing into the banks' hands, " said Richard Hunter, head of UK equities at Hargreaves Lansdown.

Lloyds, which was reported as considering a multi-billion pounds share offering at the weekend, said it would sell the bulk of its Insight Investment unit to Bank of New York Mellon (BK.N) for 235 million pounds. [ID:nLC460739]

Oil stocks added the most points to the FTSE 100 as crude prices CLc1 stabilised around $69, with BG Group (BG.L) adding 3 percent, supported by an ING upgrade to "hold" on valuation grounds, while Royal Dutch Shell (RDSa.L) gained 1.7 percent, and Tullow Oil (TLW.L) climbed 2.1 percent.

It was a mixed picture among the miners, amid concerns over the strength of any global economic recovery ahead of comments from the Fed.

Antofagasta (ANTO.L) and Lonmin (LMI.L) rose 1.4 percent and 2.3 percent, respectively, while Rio Tinto (RIO.L), Randgold Resources (RRS.L) and Fresnillo (FRES.L) fell 0.6 to 0.8 percent.