FTSE flat as miners drag; ITV rises on bid talk

* FTSE 100 flat

* Miners fall as metal prices drift lower

* ITV tops gainers on bid talk

By Michael Taylor

LONDON, Aug 12 (Reuters) - Britain's leading blue-chip index was flat by midday on Tuesday as mining shares tracked falling metal prices, while ITV gained for a third straight session on persistent bid speculation.

At 1033 GMT the FTSE 100 .FTSE was flat at 5,544.2 points, making good losses earlier in the session after Russia ordered a halt to military operations in Georgia following five days of fighting.

The benchmark index was however, little affected by a report which showed UK consumer price inflation in July rose more than expected.

On the downside, metal prices eased as investors shifted some of their money back to the dollar, which weighed on mining stocks.

Rio Tinto , BHP Billiton , Eurasian Natural Resources , Anglo American , Xstrata , Ferrexpo , Vedanta Resources and Lonmin were down 0.2 to 3.2 percent.

Topping the FTSE 100 leaderboard, British free-to-air broadcaster ITV added 9 percent to reach its highest level in more than six weeks as traders cited lingering market talk of a possible bid from TV producer Endemol.

Such talk had helped ITV rise 6.3 percent in the previous session.

Some analysts doubted whether a takeover was on the cards. "In reality, Endemol is unlikely to be interested in ITV's broadcasting assets from which it would be very difficult to separate the content business," said UBS analysts in a note to clients.

"Endemol would also lose its independent producer status in the UK."

In other sectors, banks were mixed after Switzerland's UBS , which has been Europe's hardest-hit victim of the credit crunch so far, reported a second quarter net loss of 358 million Swiss franc ($332 million), slightly worse than expected.

"It is a bit of a wake up call that we are not out of the woods yet," said Tim Hughes, head of sales trading at IG Index.

Barclays , Royal Bank of Scotland , and HSBC rose 0.5 to 1.7 percent, while HBOS and Lloyds TSB were down 0.1 to 1.3 percent.

Standard Chartered lost 3.6 percent to 1,541 pence, after Citi downgraded the Asia-focused lender to "sell" from "hold" and cut its price target to 1,300 pence from 1,525 pence.

Broker RBS also trimmed its target price on StanChart to 1,660 pence from 1,700 pence and kept a "hold" rating.

The Financial Times said nearly 60 percent of U.S. and European institutional investors surveyed by Greenwich Associates believed another big financial firm would collapse within the next six months in the continued fallout from the credit crunch.

"The UBS loss does make a difference on sentiment," said Howard Wheeldon, senior strategist at BGC Partners.

Also on the economic front, the Royal Institution of Chartered Surveyors said British house prices fell slightly less than expected in the three months to July, but the number of completed sales per surveyor fell to their lowest level in at least 30 years.

Another survey showed commercial building activity in Britain continued to contract sharply in July but property developers were slightly less gloomy about the future than a month earlier.

Marks & Spencer shed 2.1 percent after HSBC downgraded the retailer to "neutral" from "overweight".

InterContinental Hotels gained 2.6 percent after the world's largest hotelier reported a 29 percent rise in first-half operating profits, but said growth had slowed in the second-quarter, particularly in the United States.

"Just a few weeks ago, the FTSE was flirting with 5,000 but now it is 500 or so points higher," said Manoj Ladwa, senior trader at TradIndex. "If the FTSE closes higher today, then it confirms the recent bullish run and suggests the market is happy to shrug off bad news. How long that mood will last remains to be seen."

(Additional reporting by Dominic Lau; editing by Rory Channing)