UPDATE 2-FTSE 100 ends higher on improving economic activity; gains for the third week

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UPDATE 2-FTSE 100 ends higher on improving economic activity; gains for the third week

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* British firms fared less badly during Feb lockdown - survey

* NatWest gains after it shuts Irish arm

* TBC Bank falls as COVID-19 hits profit

* FTSE 100 up 0.1%, FTSE 250 adds 0.5% (Updates to close)

By Shivani Kumaresan, Amal S and Shashank Nayar

Feb 19 (Reuters) - London's FTSE 100 ended higher on Friday after the economy showed signs of improvement this month and was set to gain for the third consecutive week as investors bet that vaccine rollouts would spur economic growth.

British firms fared less badly during February's lockdown than feared and are upbeat about the prospects for growth later in 2021 when they hope the roll-out of vaccines will allow a major relaxation of COVID-19 restrictions, a survey showed. blue-chip FTSE 100 index .FTSE ended 0.1% higher with miners .FTNMX1770 and banking stocks .FTNMX8350 gaining the most, while the mid-cap index .FTMC gained 0.5%.

"There is optimism and hope that the vaccine rollouts will eventually help the economy improve while the market is awaiting the government's lcokdown easing plans to be revealed next week," said Keith Temperton, an equity sales trader at Forte Securities.

However, data on Friday showed British retail sales tumbled much more than expected in January as non-essential shops went back into coronavirus lockdowns. FTSE 100 has recovered nearly 35% from its March 2020 lows and is nearly 13% away from its highest level last year as record stimulus measures and massive vaccine rollouts helped improve investor confidence.

NatWest NWG.L gained 5.2% and was the third biggest gainer on the FTSE 100 index after it said it would wind down its Irish arm Ulster Bank, as Chief Executive Alison Rose continues to slash away at underperforming parts of the state-owned lender after it swung to a loss in 2020. Plc SGRO.L rose 1.5% after the real estate investment trust reported a near 11% jump in annual profit for 2020. group TBC Bank TBCG.L fell 6.1% after a slump in annual underlying profit due to lower interest rates and limited lending growth in the fourth quarter from the COVID-19 pandemic.

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