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* FTSE 100 up 0.3%, FTSE 250 adds 0.2%

July 5 (Reuters) - London stocks climbed on Friday after UK's Labour Party surged to a landslide victory in a parliamentary election, bringing a sense of stability to investors who expect it to end years of market volatility.

The blue-chip FTSE 100 rose 0.3%, after logging its best day in almost two months in the previous session, while the domestically focussed mid-cap FTSE 250 was up 0.2% as of 0705 GMT.

The FTSE small cap was flat.

Keir Starmer was set to become Britain's next prime minister, ending 14 years of Conservative government.

The pound held firm after the win, and was last up 0.1% against the US dollar. (Reporting by Purvi Agarwal in Bengaluru; Editing by Nivedita Bhattacharjee)