Britain's FTSE falters as commodity stocks crumple

* FTSE 100 down 0.5 pct

* Weak oil and metals prices hit miners and oil stocks

* Shire (Xetra: S7E.DE - news) rises after ADRs rallied in New York (Adds news, updates prices)

By Liisa Tuhkanen and Sudip Kar-Gupta

LONDON, Aug 18 (Reuters) - Britain's index of leading shares slipped on Tuesday, hit by a slight pick-up in inflation and a fall in energy and mining stocks, weighed down by weakening metals and oil prices.

The blue-chip FTSE 100 index was down by 0.5 percent at 6,520.16 points by 1307 GMT, about 9 percent below its record high of 7,122.74, reached in April.

Data showing British inflation edged up in July boosted sterling, in turn affecting the FTSE as a strong pound can hurt exporters.

Miners Antofagasta, Anglo American (LSE: AAL.L - news) and BHP Billiton fell between 2.9 and 2.5 percent as copper prices dropped towards six-year lows. Weak oil prices also weighed on the shares of BP and Royal Dutch Shell (Xetra: R6C1.DE - news) , down 1.2 and 1.6 percent respectively.

The oil and metals sectors have come under pressure after major commodities consumer China devalued its currency last week, fuelling fears about its economy.

"Brent crude has dropped below $50 a barrel and China, the world's largest exporter, is potentially now unleashing a new wave of deflationary forces around the world through the devaluation of its currency," said Peter Cameron, associate fund manager at EdenTree Investment Management.

"In this context it's unclear why the Bank of England would consider raising rates anytime soon, even after today's inflation figures," he added.

Among mid-caps, oil explorer Cairn Energy (LSE: CNE.L - news) dropped 8.2 percent, also hurt by a wider after-tax loss in the first half of the financial year.

On the upside, pharmaceuticals group Shire (Amsterdam: QB8.AS - news) outperformed to rise 1.6 percent.

Traders attributed Shire's advance to the fact that the company's U.S (Other OTC: UBGXF - news) -listed shares rallied towards the end of trading overnight to end up off their intraday lows, with the Nasdaq Biotech Index rising 2.1 percent on Monday.

The FTSE 100 has given up the gains it made earlier in the year, and is currently down nearly 1 percent since the start of 2015. (Editing by Mark Trevelyan)