* Blue chip index ends 3-day losing streak
* Bank of England keeps interest rates at 0.5 percent * No expansion to BoE quantitative easing scheme
By Tricia Wright
LONDON, July 9 (Reuters) - Britain's top share index closed 0.5 percent higher on Thursday, ending a three-day losing streak on the back of gains in miners after reassuring earnings from Alcoa.
The FTSE 100 index closed 18.43 points firmer at 4,158.66, having fallen 1.1 percent the previous session to its lowest closing level in more than two months.
However trading was lacklustre with volume reaching just 70 percent of the average of the last 90 trading days and there was little reaction to the Bank of England's decision not to expand its quantitative easing (QE) programme.
The Bank said it would keep interest rates steady at 0.5 percent, as expected, but disappointed expectations it would continue pumping money into the economy until August.
"We're now very much in the situation of wait and see whether the QE measures, the fiscal and monetary measures are starting to take traction," said Richard Hunter, head of UK equities at brokerage Hargreaves Lansdown.
Miners were the FTSE's top performers in the wake of Wednesday's sell off, encouraged by a less-than-expected loss from Alcoa.
Anglo American, Vedanta Resources, Kazakhmys, Antofagasta, Rio Tinto, BHP Billiton and Xstrata gained between 0.2 and 5.6 percent.
Silver miner Fresnillo grabbed the top spot on the FTSE 100 leaderboard, up 10.1 percent after Citigroup upgraded to "buy" from "hold".
MIXED OILS, BANKS
HSBC and Barclays were bright spots in an otherwise gloomy banking sector, up 1.4 percent and 0.4 percent respectively.
Lloyds Banking Group, Standard Chartered and Royal Bank of Scotland fell 0.5 to 0.6 percent.
Oil stocks were also mixed, with BG Group, Cairn Energy and Tullow Oil down 0.1 to 1.8 percent, as crude dropped below $60 a barrel.
Royal Dutch Shell added 0.5 percent, while BP climbed 0.1 percent.
Positive comment from Citigroup lifted Marks & Spencer 2.5 percent as the brokerage lifted its recommendation on the retailer to "buy" from "hold".
Peers Next and Kingfisher gained 2.5 percent and 3 percent respectively.
British Airways was also firmer, up 1.6 percent. The chairman of Spanish airline Iberia stepped down on Thursday and was replaced by proven dealmaker Antonio Vazquez, an appointment seen as boosting chances of a merger with BA.
The heaviest blue-chip faller was Aviva as the UK's second-largest insurer fell 4 percent, adding to Wednesday's sharp decline on continued concerns that falling profits may force it to cut its dividend. (Editing by David Holmes)