FTSE stays firm on commodities, Unilever post BoE

* FTSE 100 rises 0.5 pct

* BoE leaves rates unchanged; banks down

* Commodity stocks track higher metal and crude prices * Unilever surges on new CEO

By Dominic Lau

LONDON, Sept 4 (Reuters) - The UK's top share index rose 0.5 percent by midday on Thursday after the Bank of England kept interest rates unchanged as expected, while commodity stocks tracked firmer raw material prices though banks weighed.

Unilever (ULVR.L: Quote, Profile, Research, Stock Buzz) topped the FTSE 100 .FTSE gainers, rising 6.5 percent as investors cheered the food producer's announcement of appointing Paul Polman, a consumer goods veteran, as its new chief executive. [ID:nL448741]

By 1132 GMT, the FTSE 100 was up 25.8 points at 5,525.7, after hitting its day's high of 5,541.7 minutes before the rate decision.

The Bank of England left rates on hold at 5.0 percent for a fifth month running, but expectations are rising that recession worries could prompt a cut befor the end of the year.

"The decision for the Bank to sit on its hands once more was no surprise, however, evidence is rapidly mounting that the UK is edging ever closer to recession," said Martin Slaney, head of derivatives at GFT Global Markets in an e-mail.

"Everywhere you look the economic reality is becoming more and more grim: the falling housing market, the weakening pound, climbing unemployment and a struggling service sector."

Britain's economy failed to grow in the second quarter of this year for the first time since the early 1990s and many analysts believe the country has already tipped into recession.

A survey showed on Thursday British house prices fell for the seventh month running in August to stand a record 12.7 percent lower than a year earlier.

Sterling, meanwhile, hit a record low versus euro.

Banks were the top-weighted losers, with HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) shedding between 0.7 and 1.8 percent.

COMMODITIES BOOSTER

Energy stocks were the top-weighted gainers after their recent battering and after crude prices CLc1 rose by a dollar to above $110 a barrel.  Continued...