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* UK-EU agree to intensify Brexit-trade negotiations

* Moody's cuts UK debt rating on COVID-19, Brexit hit

* Amigo slips on new curbs for asset transfer

* FTSE 100 down 0.6%, FTSE 250 up 0.2%

Oct 19 (Reuters) - British midcaps edged higher on Monday on signs that Brexit-trade talks between the UK and European Union were intensifying, although gains were capped due to concerns over tougher business restrictions in Britain.

The FTSE 250 index, considered a barometer for Brexit sentiment, closed 0.2% up, boosted by shares of flexible office space provider IWG Plc which jumped 5% after Berenberg upgraded the stock to "buy."

Britain and the EU agreed on Monday to intensify trade talks and work on legal texts, a breakthrough of sorts after Prime Minister Boris Johnson said he would walk away from negotiations that had been deadlocked for weeks.

UK markets came under pressure last week as political wrangling over new coronavirus-induced lockdowns across parts of England and uncertainty about a post-Brexit trade deal sapped demand for equities.

After rising nearly 0.7% in early trading, the blue-chip FTSE 100 index ended 0.6% lower, dragged down by shares of Reckitt Benckiser, pharmaceutical and personal goods maker stocks, while a stronger pound also pressured exporters.

"The Brexit situation is incredibly volatile and getting closer to December 31 means that there is still quite a lot a big question marks around what Brexit is ultimately going to entail even though we're only two and a half months away," said Bert Colijn, a senior economist at ING.

Wales will impose a two-week "fire-break" lockdown from Friday to combat an accelerating second wave of COVID-19.

Ratings agency Moody's cut the United Kingdom's debt rating last week, while Bank of England Governor Andrew Bailey warned of a significant risk of further disappointments to domestic economic growth.

Amigo Holdings Plc tumbled 10.6% after saying it had entered an Asset Voluntary Requirement (AVR) with Britain's financial watchdog, meaning the subprime lender will need approval to transfer assets outside of the group. (Reporting by Devik Jain in Bengaluru Editing by Uttaresh.V and Matthew Lewis)