Britain's FTSE falls but outperforms Europe ahead of Italy vote

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* FTSE 100 down 0.8 pct

* Stocks sag ahead of U.S. jobs data

* Italy holding constitutional referendum Sunday

* Berkeley helps property stocks

By Alistair Smout

LONDON, Dec (Shanghai: 600875.SS - news) 2 (Reuters) - Britain's top share index fell on Friday, dropping to a 1-month low but outperforming European equities as investors were unwilling to take risky bets heading into the weekend of Italy's constitutional referendum.

The FTSE 100 was down 0.9 percent by 1021 GMT. The index was down 2.2 percent for the week, and looked set to snap a three-week winning streak.

The index followed falls in global equities as strong U.S. data suggested that Federal Reserve may have to tighten policy more quickly than investors had been expected.

U.S. non-farm payrolls are due at 1330 GMT. Markets anticipate an interest rate hike in December, but there are creeping concerns that President-elect Donald Trump's planned fiscal stimulus could overheat the economy if data is already strong.

"The market over a long period of time has had a preference for a Goldilocks economy. Not too hot to provoke inflation and stiff interest rate increases, and not to cold to lead to a recession," said Russ Mould, investment director at AJ Bell.

"There is a risk that the Trumpflation trade short-circuits itself."

Miners dropped 2.3 percent as copper turned lower, and industrials also fell.

However, the index outperformed a 1.3 percent drop for euro zone blue chip shares, ahead of Sunday's constitutional reform referendum in Italy.

Prime Minister Matteo Renzi is expected to lose the vote, which would throw the future of his government into question.

Traders said that while a "no" vote would be no surprise, investors were loath to buy stocks heading into a weekend that also sees the re-run of the presidential election in Austria, where a far-right candidate is making a strong bid for victory.

Among outperformers on the British stock market were construction and real estate stocks. Mid-cap Berkeley rose 3.6 percent after it posted a profit rise which traders said was above expectations.

The stock is down around 20 percent since Britain's vote in June to leave the European Union, and the London-centric builder has seen a 20 percent fall in demand.

"Overall we think this is a decent update and the longer term guidance over PBT should give comfort there is not a cliff edge in profits after the following two years," analysts at Numis said in a note, raising the stock to "buy" from "add".

(Reporting by Alistair Smout; editing by Mark Heinrich)