Britain's FTSE edges towards biggest weekly loss since June

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* FTSE 100 down 0.2 pct

* Index had hit 14 month high on Monday

* Admiral suffers downgrade after results

* William Hill (Frankfurt: 633847 - news) rises, lifts guidance after takeover rebuffed

By Alistair Smout

LONDON, Aug 19 (Reuters) - Britain's top share index edged lower on Friday and was set for its biggest weekly drop since June as a strong rally to 14-month highs stalled.

Britain's FTSE 100 was down 0.2 percent at 6852.64 by 0828 GMT, taking its total fall for the week to 0.9 percent, its biggest weekly decline since mid-June, before Britain voted to leave the European Union.

After initially being hit by the result of the June 23 referendum, Britain's FTSE rallied around 20 percent from its lows to a high of 6,955.34 hit on Monday -- its highest level since June 2015.

It has been buoyed by its high number of internationally focused firms that earn revenues in dollars and benefit from weakness in the pound.

However, this week has seen a series of weaker earnings reports, and some of the top gaining sectors, such as the mining sector, have edged down.

"Equities are on the back foot into the end of what has been a week of reversal from post-Brexit highs... The FTSE 100 is testing recent lows of 6850, with potential for a breakdown to extend the sell-off from Monday's 14-month highs," said Mike van Dulken, head of research at Accendo Markets.

One stock with disappointing results earlier this week was insurer Admiral. It dropped from record highs on Wednesday after it said the vote for Brexit had hit its solvency ratio, and fell again on Friday.

It was down 1.3 percent after Bernstein cut the stock to "market-perform" from "outperform". It said the stock was too expensively valued even though the broker said that the underlying results had been encouraging.

"We think Admiral presented a good set of results. In our view strong reserves and growth outweigh a capital buffer behind expectations. We downgrade Admiral... as we think the stock is close to peak "pricing cycle" valuation," analysts at Bernstein said in a note.

"Long- to medium-term there will be better opportunities to invest in this strong and well-managed company."

Among risers, easyJet rose 3.3 percent after a media report fuelled takeover speculation among traders.

The budget airline had seen its entire daily average volume traded within 2 hours of the open.

Among mid-caps, bookmaker William Hill was a top riser, up 3 percent after 888 and Rank Group ended their pursuit of the firm.

While William Hill initially fell on Thursday when the proposal was withdrawn, it had strongly rebuffed the merger interest. It responded after the market close by saying that its profit would come in at the top end of its forecast range.

Liberum raised its target price on the stock, but said that the forecast hike might not be able to satisfy investors who were hoping for synergies from a merger.

"Yesterday's statement from WMH that it now expects EBIT at the top end of previous guidance of 260-280 million pounds is probably only a stop-gap," analysts at Liberum said in a note.

" As it stands, we don't believe William Hill shareholders are likely to accept inertia after an accident-prone 2016 for the once online leader." (Reporting by Alistair Smout; Editing by Keith Weir)