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UPDATE 2-FTSE 100 soars as election talk knocks sterling

Shashwat Awasthi

* FTSE 100 up 1%, FTSE 250 up 0.5%

* Exporters boost blue-chips as sterling skids

* AstraZeneca hits record high on positive trial results

* M&S slips on FTSE 100 relegation worries (Adds news item, analyst comment, updates to closing prices)

Sept 2 (Reuters) - London's FTSE 100 surged 1% on Monday, shrugging off news of the latest U.S.-China trade tariffs, as exporter stocks firmed following a slide in sterling on the prospect of an election against the backdrop of Brexit.

The main index hit its highest in nearly a month, partly boosted by AstraZeneca, which rose 3% to an all-time high after separate trials showed its drugs helped patients with cardiovascular conditions.

The mid-cap FTSE 250 rose 0.5%, though trading volumes on both UK indexes were thin due to a U.S. market holiday.

Companies that book a major chunk of their earnings in U.S. dollars such as Diageo, Unilever and BAT jumped as the pound weakened ahead of a showdown this week between the government and the lawmakers opposed to a no-deal Brexit.

With 59 days till Britain is scheduled to leave the European Union, Prime Minister Boris Johnson threatened to purge any lawmaker in his party who votes against the government on Brexit, as he looks to make good on his promise of delivering Brexit on Oct. 31, with or without a deal.

The latest volley of tariffs between Washington and Beijing, which came into effect over the weekend, was also spurring some defensive buying.

Escalating worries over global trade and a looming recession weighed on the FTSE 100 in August, as it recorded its sharpest monthly fall since October. Meanwhile, fears of a no-deal Brexit had led the mid-caps to their first monthly fall since May.

"Gains may be fragile," Markets.com analyst Neil Wilson said of the FTSE 100's rise on Monday. "After a rough August though, traders should buckle up for more volatility in September."

On a low-key day for corporate news, Marks & Spencer shed 1.4% on expectations of being relegated from the FTSE 100 for the first time since the blue-chip index was created in 1984.

Also weighing on shares of the 135-year old retailer was Goldman Sachs reinstating coverage on the stock with a 'sell' rating, saying recent trading patterns in the retailer "continued to be disappointing".

"It is clear that UK consumers are becoming savvier, and M&S are undergoing a restructuring scheme, but it seems the consumer climate is deteriorating at a quicker rate then M&S is turning itself around," CMC Markets analyst David Madden said. (Reporting by Shashwat Awasthi and Indranil Sarkar in Bengaluru; Editing by Arun Koyyur, William Maclean)