FTSE off 0.2%; mining weakness offsets banks gains

* Miners, energy weaker as commodities dip

* Banks higher awaiting BoE interest rate decision

* Schroders up; Aviva, Amec down after results

By Simon Falush

LONDON, March 4 (Reuters) - Weakness in mining stocks offset gains in banks to leave Britain's top share index 0.2 percent lower by midday on Thursday, with investors awaiting a Bank of England interest rate decision, due at midday.

By 1122 GMT, the FTSE 100 <.FTSE> was 8.79 points lower at 5,524.42 after it closed 49.15 points, or 0.9 percent, higher on Wednesday, its fourth day of gains to end at a seven-week peak.

Banks provided the main support for the blue-chip index, with Barclays <BARC.> Standard Chartered <STAN.L>, Royal Bank of Scotland <RBS.L> and Lloyds Banking Group <LLOY.L> gaining 2 to 3.5 percent, though HSBC <HSBA.L> fell 0.2 percent.

Moves were muted ahead of the interest rate decision and announcement on quantitative easing from the Bank of England.

The central bank looks set to leave rates flat at 0.5 percent and to pause to assess the impact of the 200 billion pound stimulus it has already injected into the economy.

Investors were also awaiting U.S. jobs data on Friday for clues to the outlook for the global economy.

"There's a little nervousness ahead of the (BoE) decision, with investors watching out for changes in quantitative easing and waiting for the (U.S.) non-farm payrolls data, so we're in wait-and-see mode ahead of those big events," said Henk Potts, analyst at Barclays Wealth.

Economists polled by Reuters were unanimous in forecasting interest rates would remain at 0.5 percent this month and all but one predicted the BoE would hold fire on quantitative easing. [ID:nLDE62213L]

It is exactly a year since Britain's central bank slashed interest rates to a record low 0.5 percent and began buying bonds in an unprecedented attempt to kickstart growth.

Miners were the biggest drag on the blue chip index as metal prices weakened, taking the shine off a sector that had helped drive the market higher this week.

Rio Tinto <RIO.L>, Xstrata <XTA.L>, Lonmin <LMI.L>, Anglo American <AAL.L> and BHP Billiton <BLT.L> fell 0.5 to 0.8 percent.

POLICY DECISION

As well as the announcement from the BoE, The European Central Bank also announces its latest monetary policy decision on Thursday, with no change expected either at 1245 GMT, but investors will eye the press conference following the announcement at 1330 GMT.

"(Investors will watch for) any possible hints from the ECB about their thinking on when they will end the period of extraordinary loose monetary policy," Potts said.

Schroders <SDR.L> was the top blue chip gainer, up 3.6 percent as the investment company reported an 11 percent rise in full-year pretax profit driven by rising assets under management and higher net inflows from clients.

But investors reacted negatively to results from Amec <AMEC.L>, although the oil services and engineering group posted a 13 percent rise in full-year EBITA, with Deutsche Bank highlighting a relatively weak topline outlook.

Amec was the top blue chip faller, down 6.9 percent.

Peer Petrofac <PFC.L> shed 0.7 percent after the firm and Sweden's Lundin Petroleum <LUPE.ST> said they would spin off their North Sea oil assets into a new venture to be floated on the London Stock Exchange.

Evolution cut its rating for Petrofac to "neutral" from "buy" following the news.

Insurer Aviva <AV.L> fell 2.7 percent although it posted a better than expected 3 percent increase in 2009 profit, with brokers highlighting a weaker book value and the firm's large pension deficit.

Highlighting the headwinds facing the UK economy, house prices in Britain unexpectedly fell 1.5 percent in February, the first drop since June last year, mortgage lender Halifax said. [ID:nLAC005659] (Editing by David Holmes)