Britain's FTSE 100 slips as sterling rebounds and energy shares fall

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* FTSE 100 dips as sterling rises on strong manufacturing data

* BP, Royal Dutch Shell (Xetra: A0ET6Q - news) shares fall on weaker oil prices

* But manufacturing data lifts mid-cap FTSE 250 index

By Sudip Kar-Gupta

LONDON, Sept 1 (Reuters) - Britain's top shares index dipped on Thursday, as the market's initial gains fizzled out following a jump up in sterling after data which showed a rebound in the UK manufacturing sector.

Sterling climbed 1 percent to hit a one-month high and traded above $1.32 against the dollar after data showing one of the sharpest rebounds on record in August for the British manufacturing sector.

The Markit/CIPS Purchasing Managers' Index (PMI), a closely watched gauge of factory activity, jumped to a 10-month high of 53.3 in August, recovering from the three-year low it hit in July after Britain's June 23 vote to leave the European Union.

That in turn weighed on the blue-chip FTSE 100 equity index , since a weaker sterling typically benefits many of the FTSE's internationally-focused and export-oriented companies.

The FTSE 100 was down 0.3 percent at 6,763.98 points in late session trading, underperforming gains elsewhere in Europe, with the pan-European STOXX 600 index up 0.8 percent.

The shares of oil majors Royal Dutch Shell and BP also weakened in tandem with lower oil prices.

"The FTSE is underperforming in the session driven by a combination of a stronger pound and further downside pressure on commodities," said OANDA senior market analyst Craig Erlam.

In contrast, however, the FTSE 250 mid-cap index - which is more sensitive to the domestic UK economy than the blue-chip index - rose 1 percent after the relatively strong set of manufacturing data.

The FTSE 100 is up around 10 percent so far in 2016, although the U.S (Other OTC: UBGXF - news) . dollar value of UK shares has been impacted by a drop in sterling in the immediate aftermath of June's Brexit vote for Britain to quit the EU. (Additional reporting by Kit Rees; Editing by Raissa Kasolowsky)