Anglo American leads Britain's FTSE higher, Whitbread slides

* FTSE 100 index up 0.5 pct at close

* Anglo American leads market higher

* Whitbread falls after update

* Broker downgrades weigh on midcaps (Adds detail and quote, updates prices at close)

By Kit Rees and Atul Prakash

LONDON, Oct 25 (Reuters) - Britain's top share index climbedon Tuesday, boosted by basic resources stocks, with AngloAmerican leading the market higher after a productionupdate, though a slew of broker downgrades weighed on UK midcapstocks.

Anglo American shares were up 4.6 percent, taking itsyear-to-date gains to more than 270 percent and making it thetop performing stock on Britain's blue-chip FTSE 100 index and Europe's STOXX 600 this year.

The UK mining index, up nearly 90 percent thisyear, rose 3.7 percent to its highest since mid-2015. Shares inother miners including Rio Tinto, Glencore, BHPBilliton and Antofagasta - up 3 to 4.5 percenton Tuesday - have surged between 16 and 174 percent in 2016.

The mining sector also tracked a rally in industrial metals,with prices of copper, aluminium and nickel rising more than 2 percent thanks to a weaker dollar.

"It seems investors are looking past the debt issues thatsaw mining shares plummet last year," said Jawaid Afsar, seniortrader at Securequity.

Anglo American's performance, as well as that of the broadersector, is a marked turnaround from last year when a slowingChina and high debt sent investors rushing for the exits.Investors have cheered moves to cut costs aggressively and sellassets to bolster balance sheets.

The FTSE 100 index was up 0.5 percent at 7,017.64 points atits close after slipping in the previous two sessions, alsohelped by a fall in sterling.

Shares in hotel operator Whitbread fell 3.7 percentand were the top faller on the FTSE 100 index, after the companysaid sales growth slowed and margins declined at its CostaCoffee chain, overshadowing a better-than-expected first-halfprofit.

"The strength of Premier Inn and Costa is being tested, notleast by the National Living Wage, which has raised staffingcosts," said Laith Khalaf, analyst at Hargreaves Lansdown.

"If Brexit does precipitate an economic slowdown next year,that will damage the appetite of businesses and consumers tospend money on hotel rooms."

A spate of broker downgrades weighed on the FTSE 250, which slipped 0.3 percent. The moredomestically-focused index is up only 2.6 percent since thevote, once more lagging the blue chip FTSE 100, which is up byaround 11 percent since the close of June 23.

Countrywide, Laird, Howden Joinery,Mitchells & Butlers and Aldermore all droppedbetween 3.3 to 7.9 percent, with almost every brokerage citingconcerns about a post-Brexit economic slowdown impacting thesebusinesses.

Jefferies mentioned changes in stamp duty as well asuncertainty following the UK's June vote to leave the EuropeanUnion as reasons for their downgrade on property services groupCountrywide to "hold" from "buy".

"When we add 'Brexit uncertainty' into the mix, potentialhomebuyers have more reason to play a waiting game with respectto house purchases, and falling transaction levels are a keydriver of our estimate cuts today," analysts at Jefferies saidin a note. (Reporting by Kit Rees)