* Fed Chair Powell to update on U.S. rate outlook at 1400 GMT

* UK inflation data swings betting on BoE rate hike

LONDON, June 21 (Reuters) - Stocks were flat on Wednesday while bond yields rose as a lack of new stimulus from Beijing, bearish British inflation data and a slump in European real estate stoked unease ahead of testimony from U.S. Federal Reserve Chair Jerome Powell.

The world's most powerful central banker faces lawmakers in two days of testimony and is sure to be questioned on whether rates will really rise again in July and peak in a 5.5% to 5.75% range as projected.

Markets have their doubts and currently imply about a 78% chance of a hike to 5.25-5.5% next month, with that likely to be the end of the entire tightening cycle.

"The focus is on whether the July meeting is truly 'live' and if the Fed dot plot of two more hikes is a true base case depending on the data, or doom-mongering on inflation in an effort to ensure no premature easing in financial conditions," said Tapas Strickland, head of market economics at NAB.

The uncertainty nudged S&P 500 futures and Nasdaq futures down 0.01% after close to a 0.2% dip in Europe's benchmark STOXX index and a 1% fall in MSCI's broadest index of Asia-Pacific shares outside Japan.

Short-dated Euro zone government bond yields hit new highs, with Germany's two-year bond yield - the most sensitive to policy rates expectations - rising to its highest since March 10 at 3.235% before dropping to 3.18%, up 1.5 basis points (bps) on the day.

It hit its highest since October 2008 at 3.385% on March 9.

"European fixed-income markets have been unsettled by the latest UK inflation data, which came in above expectations, pointing to further rate hikes," said Jerry del Missier, chief investment officer at Copper Street Capital.

"Bond market bulls see every piece of weak data as a sign that easing is right around the corner, but given the current inverted shape of yield curves, disappointment and volatility come with every sign of strength."

INFLATION NATION BRITAIN

Investors ramped up their bets on the Bank of England raising rates by a hefty half a percentage point after data showed inflation defied expectations that it would have slowed by holding at 8.7% in May.

That pushed interest rate futures to suggest a roughly 45% chance of a punchy 50 bps increase to the base rate, up from a 25% chance as of Tuesday.

The latest figures again make British inflation the highest of any major advanced economy and sent the domestically focused FTSE 250 index down 0.9% to its lowest in 11 weeks.

Housebuilders declined 3% at one point as the prospect of more rate increases raised fresh concerns about mortgage costs.

The U.S. dollar was firmer ahead of Powell's congressional testimony, with the dollar index up 0.1% at 102.62.

The battered Japanese yen won some respite as risk aversion prompted profit-taking on very crowded short positions. The currency has been falling for weeks as the Bank of Japan (BOJ) doggedly defended its super easy policies.

Minutes of the central bank's last meeting showed only one of nine board members suggested reconsidering its policy of keeping bond yields low, and even then suggested it was best to wait a while.

That lack of urgency should limit any bounce in the yen and kept the dollar underpinned at 141.84 yen, just off Tuesday's seven-month high of 142.26.

The euro, likewise, steadied at 154.83 yen, not far from its recent peak of 155.37.

The single currency was flat against the dollar at $1.0916 while sterling firmed slightly as the hotter than expected inflation data raised expectations of bigger central bank rate hikes.

Rising interest rates and higher bond yields have been a burden for gold, which was pinned at $1,934 an ounce, just above last week's three-month low of $1,924.99.

Oil prices stabilised after a couple of sessions of losses, still struggling with concerns about Chinese demand in the absence of a sizable stimulus package.

The Brent benchmark edged down 4 cents to $75.86 a barrel while U.S. crude lost 3 cents to $71.16.

(Reporting by Lawrence White and Wayne Cole Editing by Jacqueline Wong, Lincoln Feast, Alex Richardson and David Goodman)