* SSP gains on sales recovery

* FTSE 100 down 0.2%, FTSE 250 off 1.2%

* Both indexes set for weekly gains

Feb 4 (Reuters) - London's FTSE 100 ended the week in positive territory after two weeks' of losses despite edging lower on Friday as banks retreated a day after the Bank of England raised interest rates to curb soaring inflation.

The FTSE 100 index closed 0.2% lower, reversing earlier gains and leaving it 0.6% higher over the week. Meanwhile, the mid-cap index declined 1.2% but still recorded its first weekly gain after a four-week losing streak, advancing 0.5%.

Energy stocks outperformed, rising 3.8% to their highest level in nearly two years as oil prices extended gains on U.S. supply concerns amid frigid U.S. weather and ongoing political turmoil.

Base metal miners ended the day flat, while banks dropped 1.2% after rallying as much as 2.4% this week.

"If you've got a rising interest rate into an economy that is weakening, consumer sentiment crashing, and many other factors that domestic UK banks are facing right now, that can push traders to sell off a little bit after a week's rally," said Keith Temperton, a sales trader at Forte Securities.

The Bank of England raised interest rates to 0.5% on Thursday and nearly half of its policymakers wanted a bigger increase to contain rampant price pressures, as the central bank warned inflation will soon top 7%.

Two-year yields on British bonds rose to their highest since April 2011, while the five-year yields touched a level last seen in October 2018.

Shares in SSP rose 0.7% as the Upper Crust owner said its sales were recovering after a slowdown in recent weeks when fewer people traveled due to Omicron-led curbs, hitting its stores at train stations and airports.

(Reporting by Tanvi Mehta and Amal S; Editing by Kirsten Donovan)