UPDATE 2-FTSE 100 up on banks and consumer staples for second week of gains

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* GDP falls by 2.9% in January from December

* Burberry jumps on upbeat outlook

* AstraZeneca cuts COVID-19 vaccine forecast

* FTSE 100 up 0.4%, FTSE 250 off -0.1% (Updates to close)

March 12 (Reuters) - London’s FTSE 100 reversed course on Friday and ended a strong week on an upbeat note, with banks and consumer staples leading gains, while data showed the UK economy shrank by less than feared in January.

The blue-chip FTSE 100 index ended 0.4% higher on Friday and rose for the second consecutive week, as investors bet on a gradual easing of coronavirus restrictions and a steady vaccination programme to eventually spur growth.

Britain’s economy contracted by 2.9% in January from December as the country went back into a lockdown and is likely to shrink by 4% in the first quarter of 2021, official data showed.

“The big message that investors will take from today’s GDP figures isn’t that there was a fall in January, but that the fall was far less steep than most economists had predicted,” said Danni Hewson, analyst at AJ Bell.

Bank stocks, including Barclays PLC, HSBC Holdings plc, Lloyds Banking Group and Standard Chartered gained between 0.8% and 3.6%, tracking higher U.S. Treasury yields.

A selloff in U.S. debt resumed, with yields on benchmark 10-year notes approaching the one-year highs touched last week.

A raft of global stimulus has helped the FTSE 100 rebound more than 37% from its coronavirus-driven crash last year, but it has lagged its European peer, the STOXX 600 index, on worries about the economic damage from prolonged lockdowns.

The domestically focused mid-cap FTSE 250 index fell 0.1%, dragged down by tech and discretionary consumer stocks.

Luxury group Burberry rose 6.9% to the top of the blue-chip index after recording a strong rebound in sales since December, which it expected to result in a profit for the year to March 27 - beating market forecasts.

AstraZeneca Plc fell 0.9%, after scaling back its planned deliveries of COVID-19 vaccines to the European Union in the first quarter to about 30 million doses, a third of its contractual obligations and a 25% drop from pledges made last month. (Reporting by Shivani Kumaresan and Amal S in Bengaluru; Editing by Rashmi Aich)