Morrisons jumped 11.3% and was the top boost to the mid-cap index as the $8.7 billion bid battle for the supermarket chain intensified on Monday when a third private equity group entered the fray.

The domestically-focused FTSE 250 index rose 1.2%, with base metal miners gaining nearly 1.5%. Travel stocks surged 2.3% on the prospect of a reopening.

"Supermarkets have done well since the beginning of the lockdown last year and with the restrictions about to be lifted, these stocks are well geared to gain ... with an added benefit of a lot of them being a target of foreign flows," said Michael Baker, an analyst at ETX Capital.

British Prime Minister Boris Johnson was due on Monday to set out plans to end COVID-19 restrictions, in a test of whether a rapid vaccine rollout offers enough protection from the highly contagious Delta variant.

The blue-chip FTSE 100 index rose 0.6%, led by gains in financial stocks.

"Looking at London markets today investors seem pretty sure the vaccine rollout has changed things from this time a year ago," said Danni Hewson, a financial analyst at AJ Bell.

The FTSE 100 has gained nearly 11.0% so far this year on government stimulus support and record low interest rates but has largely underperformed its European and domestic mid-cap peers and continues to be one of the lowest valued markets.

The post-lockdown bounce-back for British services firms eased only slightly in June but price pressures increased by the most on record, adding to signs of a further rise in inflation ahead, a survey showed.

Among stocks, Spire Healthcare dropped 2.8% even after Australia's Ramsay Health Care sweetened its buyout offer to about 1.04 billion pounds ($1.44 billion).

Graphic: British blue-chips turn cheaper than mid-caps -

(Reporting by Shashank Nayar in Bengaluru; Editing by Uttaresh.V, Shounak Dasgupta and Barbara Lewis)

By Shashank Nayar