UK's FTSE touches record highs as IAG, Standard Chartered rise

* FTSE 100 sets record intraday high of 6,967.24 points

* Index closes flat at 6,946.66 points

* Canaccord upgrade boosts Standard Chartered (HKSE: 2888.HK - news)

* Airline IAG touches record highs

* Intu Properties (Other OTC: CCRGF - news) falls after results

* Lloyds edges higher after resuming dividend

By Sudip Kar-Gupta

LONDON, Feb 27 (Reuters) - Britain's top equity index touched a record high on Friday, helped by gains in Asian-focused bank Standard Chartered and International Consolidated Airlines Group.

The blue-chip FTSE 100 index at one stage rose as much as 0.3 percent to a record intraday high of 6,967.24 points, before easing back to close flat at 6,946.66 points.

The index rose around 3 percent over February and is up by around 6 percent since the start of 2015.

The FTSE has benefited along with other world stock markets from record low interest rates and central bank stimulus measures. Signs of a UK economic recovery have also pushed the British stock market higher.

The low interest rates have hit returns on bonds and cash, forcing many investors to look for better returns from the stock market and company dividends.

"We should hit 7,000 points soon, at which point you could see some profit-taking, but the momentum seems to be to the upside for now," said Nav Banwait, chief markets strategist at Thames Capital Markets.

International Consolidated Airlines Group (IAG), the owner of British Airways, rose 3.7 percent and briefly set a record high after increasing its 2015 profit forecast.

Standard Chartered also advanced for the second day in a row, rising 1.5 percent, after Canaccord Genuity (Other OTC: CCORF - news) upgraded its rating to "hold" from "sell".

Intu Properties Plc fell 5.1 percent, making it the worst FTSE 100 stock in percentage terms, after the shopping centre owner posted its third consecutive yearly decline in net rental income.

Royal Bank of Scotland (LSE: RBS.L - news) , which announced on Thursday further cutbacks in investment banking and a 3.5 billion-pound ($5.39 billion) loss, also dropped 5 percent after Societe Generale downgraded it to "sell" from "hold" and JP Morgan cut its price target.

RBS rival Lloyds -- which along with RBS was bailed out during the financial crisis of 2007-2009 -- rose 0.6 percent after announcing its first dividend in more than six years.

Steve Ruffley, chief market strategist at InterTrader, also expected the FTSE to hit a record 7,000 points soon. But it may then fall back as uncertainty grows before Britain's general elections in May.

"Buy every intraday low point of value you can find until we hit 7,000. After that, be wary of staying 'long'," he said.

($1 = 0.6494 pounds) (Additional reporting by Francesco Canepa; Editing by Larry King)