UPDATE 1-Britain's FTSE lags Europe as dollar earners dip

* FTSE 100 down 0.1%

* Burberry boosted by Moncler speculation

* IGG and DS Smith slip after results

* M&G down 2% on suspension in dealing in property fund
(Adds detail, updates shares, adds analyst)

LONDON, Dec 5 (Reuters) - Britain's top share index lagged
other European markets on Thursday, dragged down by dollar
earners as sterling continued to march higher amid growing
expectation that next week's general election will not result in
a hung parliament.

Sterling rallied to a 2-1/2 year peak against the euro and a
seven-month high against the dollar.

A stronger pound weighs on the overseas earnings of
multinationals such as HSBC, Unilever as well
as mining companies.

The blue-chip FTSE 100 index was down 0.1% lower by
0950 GMT while the more domestically focused mid-cap index, the
FTSE 250, was flat.

The euro zone's STOXX 50E benchmark was up 0.2%.

"The pound became Thursday’s focus, one week away from the
UK’s general election," said Spreadex analyst Connor Campbell.

The best performer among blue chips was Burberry.
Like much of the European luxury sector, Burberry was boosted by
a report that French group Kering had expressed
interest in a potential takeover of Italy's Moncler.

The M&A speculation comes hard on the heels of LVMH's
$16 billion takeover of jeweller Tiffany and
has reinforced the appeal of the sector despite U.S. threats to
slap tariffs on French luxury products.

Burberry was up 3.5% while European peers Moncler, LVMH,
Kering and Hugo Boss also gained, with Moncler's 9.2%
jump leading the pack.

Fund manager M&G Investments, meanwhile, fell more
than 4% after it suspended dealing in its flagship UK property
fund on Wednesday, citing the impact of Brexit uncertainty.

Another significant mover was online fashion retailer Boohoo
, which slid by more than 5% after its founders sold
shares worth 142.5 million pounds ($182.8 million).

Online retailers such as Boohoo have been growing at the
expense of traditional shopping groups such as the 135-year-old
Marks & Spencer.

Online trading platform IG Group and DS Smith
were both down more than 2% after financial results
failed to cheer investors.
(Reporting by Thyagaraju Adinarayan, Julien Ponthus and Joice
Alves
Editing by David Goodman)