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* AstraZeneca up after HSBC initiates with "buy" rating

* FTSE 100 set for best week since March

* UK CPI due next week

* FTSE 100 adds 0.1%, FTSE 250 off 0.3%

July 14 (Reuters) - UK's FTSE 100 edged higher on Friday as AstraZeneca rose after HSBC took a bullish stance on the drugmaker, while the index is on track for a strong weekly gain on optimism around U.S. interest rates peaking.

The blue-chip FTSE 100 rose 0.1%, while the more domestically-focussed FTSE 250 midcap index fell 0.3%, on track to snap a five-day winning streak.

The FTSE 100 is poised for its best weekly performance in more than three months, while the midcap index eyes its best week in six months despite Friday's losses.

Global markets have rallied this week as evidence of cooling inflation in the United States bolstered hopes that the Federal Reserve is nearing the end of its rate-hike cycle.

AstraZeneca gained 1.3% after HSBC initiated coverage on the drugmaker with a "buy" rating. The broader pharmaceuticals and biotech sector rose 0.8%.

Meanwhile, UK June consumer prices data due next week, will be key in assessing the state of the economy and where the Bank of England (BoE) stands on the monetary policy tightening.

The UK's inflation rate soared above 8% in May, one of the worst among developed nations.

"We think that the inflation problem is entrenched," said Andreas Bruckner, European equity strategist at Bank of America.

"Inflation will slowly come down, but it's nowhere near any comfortable targets ... so more BoE rate hikes will need to be delivered."

The head of Britain's Office for Budget Responsibility (OBR) said inflationary pressures are becoming more embedded in the economy.

The focus would be on U.S. earnings, with big banks including JP Morgan, Wells Fargo and Citigroup set to report their quarterly results later in the day.

Among individual stocks, Ashmore lost 6.9% after the investment group reported a $1.8 billion drop in assets under management for the quarter ended June.

Spirax-Sarco Engineering added 2.6% after UBS upgraded the valve maker's rating to "buy" from "neutral".

McBride jumped 19.6% after the cleaning products maker said it expects full-year adjusted operating profit to be ahead of current market expectations. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob-Phillips and Janane Venkatraman)