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* Banks record biggest weekly rise since November 2020

* Aston Martin edges up on sales boost

* C&C Group down after December sales miss estimates

* FTSE 100 up 0.5%, FTSE 250 off 0.3%

Jan 7 (Reuters) - The FTSE 100 rose on Friday to end the first week of the year higher on support from heavyweight banking and mining stocks, while investors sought to interpret mixed U.S. jobs data and its impact on Federal Reserve policy.

The commodity-heavy FTSE 100 ended 0.5% higher, rising for a third consecutive week with banks and miners leading gains.

Barclays and HSBC Holdings were among the top boosts on the index, tracking gains in benchmark bond yields . Miners Anglo American and BHP Group were the top gainers on strong metal prices.

UK bond yields rose for a fourth straight week and bank stocks recorded their biggest weekly rise in nearly 14 months after the Bank of England's first rate hike in mid-December and hawkish comments from the U.S. Fed bolstered rate expectations.

The latest U.S. payrolls report showed weaker-than-expected jobs growth, while the unemployment rate fell to pre-pandemic levels of 3.9%.

The UK's benchmark index this week outperformed its European peers and the domestically focussed midcap index, with both the STOXX 600 and FTSE 250 ending the first week of the year lower.

"The FTSE 100 has underperformed over the past two years, so it's less susceptible to the big sell-off seen in some of the more highly valued areas of the market this week," Michael Hewson, chief market analyst at CMC Markets UK, said.

The domestically focussed mid-cap index declined 0.3%.

Aston Martin jumped 6.6% after sales to dealers in 2021 surged 82%, even as the British luxury automaker forecast lower-than-expected annual adjusted core earnings.

C&C Group fell 2.7% after the drinks maker's December sales lagged expectations due to pandemic-related curbs in the UK and Ireland.

British advertising group M&C Saatchi dropped 12.4% after it said it did not see much merit in a possible all-share takeover instigated by its biggest investor.

Software entrepreneur Vin Murria outlined plans for a tie-up with an associated acquisition vehicle on Friday.

(Reporting by Bansari Mayur Kamdar and Shashank Nayar in Bengaluru; Editing by Shounak Dasgupta and Jan Harvey)