Britain's FTSE advances, boosted by banks

* FTSE 100 up 0.2 pct

* Banks top gainers

* Miners up on FX weakness

* Intercontinental Hotels Group falls as M&A hopes dashed

* Utilities hit by broker downgrades

By Kit Rees

LONDON Nov 9 (Reuters) - UK shares advanced on Monday as the prospect of a higher interest rate environment boosted banks following Friday's stronger-than-expected U.S (Other OTC: UBGXF - news) . jobs data.

Financial companies led the index higher, with Aberdeen Asset Management, Standard Chartered (HKSE: 2888.HK - news) , Barclays (Swiss: BARC.SW - news) and HSBC all rising between 1.6 percent and 3.5 percent.

Investors welcomed the prospect of a higher interest rate environment following strong U.S. jobs data on Friday which suggested that a Federal Reserve rate hike in December was on the cards.

Miners also led the index higher, with Glencore (Xetra: A1JAGV - news) up 1.7 percent, Rio Tinto (LSE: RIO.L - news) up 1.5 percent, Anglo American (LSE: AAL.L - news) rising 1.2 percent and Antofagasta (Other OTC: ANFGF - news) up 1.1 percent on the back of dollar weakness, which means that dollar-denominated commodities become cheaper.

"Sterling steadied a little bit today, it takes a little bit of pressure off the dollar earners," Zeg Choudhry, managing director at Lontrad, said.

"Overall, you've got some currency relief and financials that would benefit from a rise in U.S. rates, international banks especially."

The blue-chip FTSE 100 index advanced 0.2 percent at 6,364.92 points at 0931 GMT, outperforming other European indexes which were all in negative territory.

The top faller on the index was Intercontinental Hotels (Other OTC: ICHGF - news) Group, down 4 percent after it said that it was not considering a potential sale or merger of the company.

On Friday, shares in the hotelier jumped over 6 percent following a media report that the company was looking at its strategic options.

Utilities companies were also under pressure, with Severn Trent (BSE: TRENT.BO - news) falling 1.8 percent, United Utilites Group down 1.6 percent, Centrica (LSE: CNA.L - news) down 1.3 percent and Unilever (LSE: 0NXN.L - news) retreating 1.1 percent.

Traders cited a series of broker target price cuts to the sector and investors' concerns over the performance of high-yielding stocks, such as utility companies, in a potentially higher-interest rate environment.

(Reporting by Kit Rees; Editing by Tom Heneghan)