FTSE gains as commodities outweigh weak banks

* FTSE 100 rises 0.4 pct

* Unilever surges on new CEO

* Banks fall ahead of BoE decision

By Dominic Lau

LONDON, Sept 4 (Reuters) - The UK's top share index drifted higher in late morning trade on Thursday ahead of the Bank of England's interest rate verdict, as gains in commodity stocks and food producer Unilever (ULVR.L: Quote, Profile, Research, Stock Buzz) offset weakness in banks.

By 1022 GMT, the FTSE 100 .FTSE was up 22 points, or 0.4 percent at 5,521.7, reversing some of the previous session's 1.2 percent fall.

Energy stocks were in demand after recent battering and after crude prices CLc1 rose by a dollar to above $110 a barrel.

BP (BP.L: Quote, Profile, Research, Stock Buzz) advanced 3.5 percent, also aided by a deal with the Russian oligarch co-owners of TNK-BP venture, ending months of increasingly hostile dispute. [ID:nL482834]

Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz) and Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) put on between 0.1 to 2.7 percent.

BG Group (BG.L: Quote, Profile, Research, Stock Buzz) strengthened 4.8 percent with traders citing market talk of bid interest from Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz). BG declined to comment.

Miners also gained, tracking higher metal prices. BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz) and Ferrexpo (FXPO.L: Quote, Profile, Research, Stock Buzz) rose between 0.9 and 3.2 percent.

Unilever, however, topped the FTSE 100 gainers, rising 6.3 percent as investors cheered the food producer's announcement of appointing Paul Polman, a consumer goods veteran, as its new chief executive. [ID:nL448741]

All eyes are on the Bank of England's interest rate decision due at 1100 GMT. Analysts expects the central bank to leave rates unchanged at 5 percent but expectations are rising that a stuttering economy will force it to cut rates before the end of the year.

"It's too early (for a rate cut) with inflation where it is. The sentiment is to keep rates unchanged," said Mark Foulds, head of equity sales at TradIndex.

"As for the market, it is dead on the back of waiting for that decision. I don't see activity picking up this afternoon. It has got a very quiet feel to it."  Continued...