UPDATE 2-UK's FTSE 100 records best day in nearly 4 weeks on dovish Fed remarks

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Croda up on multiple price target hikes

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UK grocery inflation eases to 11%

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FTSE 100 up 1.8%, FTSE 250 adds 2.3%

(Updated at 1600 GMT)

By Khushi Singh and Bansari Mayur Kamdar

Oct 10 (Reuters) -

London's FTSE 100 index posted its best daily performance in nearly a month on Tuesday as bond yields eased after dovish comments from Federal Reserve officials raised hopes the Bank of England would not hike interest rates further.

The internationally focused FTSE 100 was up 1.8%, with a sharp jump in banks boosting the index.

Atlanta Federal Reserve Bank President

Raphael Bostic

said the Fed does not need to raise interest rates any further, following top Fed officials who indicated on Monday that rising yields on long-term U.S. bonds could steer the Fed from further increases in its short-term policy rate.

The yield on Britain's 10 year note retreated to 4.43% from 4.47% in the previous session.

British grocery inflation eased to its lowest rate for 15 months heading into October, data showed, providing more relief for shoppers hurt by high prices.

Another set of data showed UK consumers held off on much of their non-essential spending last month.

"UK retail sales and spending data for September showed that consumer spending patterns had changed during the month, with the warmer weather prompting increased sales of drinks and other barbecue related goods," said Michael Hewson, chief market analyst at CMC Markets UK.

"While clothing sales slowed, this type of spending will probably pick up when the weather gets colder and wetter, so has merely been deferred."

Meanwhile, an International Monetary Fund report showed Britain is poised to be the slowest-growing economy among the Group of Seven nations next year.

The more domestically focused FTSE 250 index gained 2.3%, its best daily performance in 12 weeks, supported by a recovery in travel and leisure stocks.

Among individual stocks, YouGov jumped 23.9% after the polling company met earnings expectations with a 63% surge in adjusted pretax full-year profit.

Electricals retailer Currys added 5.0% on receiving several non-binding offers from potential buyers for its under-review Greek business Kotsovolos.

Croda International rose 3.4% as multiple brokerages raised their price target on the life sciences company. (Reporting by Khushi Singh and Bansari Mayur Kamdar in Bengaluru; Editing by Dhanya Ann Thoppil, Savio D'Souza and Chris Reese)