Britain's FTSE boosted by Barclays, hopes for ECB action in June

* FTSE 100 index rises 0.5 percent

* Draghi says ECB poised to shore up economy as soon as June

* Barclays (LSE: BARC.L - news) gains on bold revival plan

By Tricia Wright

LONDON, May 8 (Reuters) - Britain's top shares neared

nine-week highs on Thursday led by Barclays after it announced a

revival plan, while investors also welcomed the possibility of

more stimulus steps from the European Central Bank in June.

Barclays was the standout gainer on the FTSE 100

, up 8.3 percent after it said it would cut 19,000 jobs

in the next three years and set up a "bad bank".

"Barclays' significant restructuring to simplify the group

is welcomed by investors...even if it means the flagship

investment banking division, which has driven things for so

long, needs scaling back," said Mike van Dulken, head of

research at Accendo Markets.

Strong full-year results lifted BT Group (LSE: BT-A.L - news) by 2.5

percent, and together Barclays and BT added most points to the

FTSE 100, up 32.26 points or 0.5 percent at 6,828.70 by

1459 GMT, within sight of levels last seen in late February.

Brightening the mood, the ECB, which is trying to counter

the risk of low inflation in the euro zone, kept rates on hold

but president Mario Draghi said the council could act next month

when its staff forecasts are published.

CMC Markets senior market analyst Michael Hewson saw scope

for the UK benchmark to retest 6,875 - the 2013 high - or even

6,900.

"There is potential for further gains simply because... if

the inflation data continues to show no signs of improving, the

likelihood is that the market will try and front-run a rate cut

or some form of action in June," Hewson said.

The broader market's advance was capped by sharp falls in

some shares. Sage Group (LSE: SGE.L - news) fell 5.6 percent as Chief

Executive Guy Berruyer said he would step down, and its results

disappointed some investors.

Equity markets have been buoyed in recent weeks by a burst

of deal-making and bids, offsetting concerns about a lacklustre

corporate earnings season.

With valuations for the UK equities not far above their

long-term average, some analysts are bullish. The FTSE 100 index

trades on a 12-month forward rice/earnings ratio of 13.5 times,

against its 10-year average of 11.8 times, Thomson Reuters (Frankfurt: TOC.F - news)

Datastream shows.

Ashish Misra, head of investment policy at Lloyds Bank

Private Banking, reckoned on getting about 10 percent total

return from UK equities over the next year, a figure comprising

continued earnings growth at about 7 percent and a dividend

yield of about 3 percent.

"There aren't too many asset classes that we look at in

global markets which are offering that sort of attractive

double-digit return over a 12-month window," he said. "I'm less

concerned about the shorter-term noise."

(Additional reporting by Atul Prakash; Editing by Hugh Lawson)