FTSE edges lower, Next weather warning hits retailers

* Blue-chip FTSE 100 index dips 0.1 percent

* Retailers under pressure as Next (Other OTC: NXGPF - news) warns on weather

* RBS (LSE: RBS.L - news) advances after cutting provisions for bad loans

By Atul Prakash

LONDON, Sept 30 (Reuters) - Britain's top share index edged lower on Tuesday, with retailers falling after Next said it would have to lower its full-year profit forecast if the unusually warm weather continued.

Britain's No. 2 clothing retailer fell 3.5 percent, the top decliner in the blue-chip FTSE 100 index, after saying the country's unusually warm autumn weather was deterring shoppers from buying winter clothing.

Its third quarter sales to date were up 6 percent, lower than its previous forecast of up 10 percent.

"Next does not often lower guidance. So the fact that they have said they may do so due to the warmer weather is hitting the shares, which have had a strong run, and will also hit the sector if the weather remains unseasonal," Securequity sales trader Jawaid Afsar said.

The weather warning put pressure on other retailers, with Marks & Spencer (Other OTC: MAKSF - news) falling 2.9 percent to be the second biggest decliner in the benchmark share index.

The FTSE 100 index was down 0.1 percent at 6,641,82 points by 0750 GMT. The index, which dropped 2.8 percent last week, is down about 1.5 percent so far this year.

"We continue to highlight the bearish possibility of more downside given the increase in concerns over the last week," Accendo Markets head of research, Mike van Dulken, said.

Investors stayed cautious following soft manufacturing data from China, the world's biggest metals consumer, and civil unrest in Hong Kong, where tens of thousands of pro-democracy protesters extended a blockade of streets.

The UK mining index fell 0.3 percent as the final HSBC/Markit Manufacturing Purchasing Managers' Index (PMI) hovered at 50.2 in September, lower than a preliminary reading of 50.5.

On the positive side, Royal Bank of Scotland was the top FTSE 100 gainer after saying it will release a substantial amount from provisions it had set aside to cover losses on bad loans.

RBS rose 3.8 percent after the state-backed bank said it will release 800 million pounds ($1.3 billion) from provisions after an improvement in the economy, especially in Ireland (Other OTC: IRLD - news) . (Additional reporting by Sudip Kar-Gupta; Editing by Louise Ireland)