Britain's FTSE touches fresh record high as sterling slides

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* FTSE 100 flat

* RBS (LSE: RBS.L - news) , Barclays (LSE: BARC.L - news) under pressure

* Mining firms rally

By Kit Rees

LONDON, Jan 16 (Reuters) - Britain's top share index touched a fresh record high on Monday in choppy trade after sterling tumbled to a three-month low on worries that Britain was headed for a "hard" Brexit from the European Union.

The blue chip FTSE 100 index was flat in percentage terms by 0858 GMT, touching a fresh all-time high of 7,354.14 points earlier in the session, outperforming its European peers.

The more domestically-exposed FTSE 250 index fell 0.1 percent.

Sterling dropped as much as 1.5 percent following media reports that Prime Minister Theresa May will signal a "hard" Brexit for Britain from the European Union in her speech on Tuesday.

A "hard" Brexit scenario would prioritise immigration controls and bilateral trade deals that would see Britain leaving the EU's single market and customs union.

Banking stocks were the top fallers, with Royal Bank of Scotland and Barclays both down more than 2 percent.

"Having access to the single market is key for (the banks), or indeed if they can't have access, then what the particular requirements of the passporting might be for them to be able to still do business across Europe," Dafydd Davies, partner at Charles Hanover Investments, said.

"If it is a genuinely hard Brexit and then they have to look at relocation costs, that could be quite substantial for them. However at the moment, it's very much a wait-and-see situation."

A drop in sterling, however, benefits the FTSE 100's international, dollar-earning firms, giving them a currency-related accounting boost. In 2016, the FTSE 100 was the best performer among major regional indexes in Europe, gaining more than 14 percent.

Mining companies were among the biggest risers among the blue chips, with Anglo American (LSE: AAL.L - news) , BHP Billiton (NYSE: BBL - news) and Glencore (Frankfurt: 8GC.F - news) all up between 0.8 percent to 1.9 percent. Precious metals miners Randgold Resources and Fresnillo (Amsterdam: FN6.AS - news) both rose around 1.2 percent, helped by a firmer gold price. (Reporting by Kit Rees; Editing by Janet Lawrence)