Britain's FTSE 100 steadies near 17 month highs

A man walks past the London Stock Exchange in the City of London October 27, 2008.

LONDON (Reuters) - Britain's FTSE 100 was flat on Thursday, consolidating recent gains after it had smashed through the 6,000 level for the first time in 17 months in the previous session.

By 3.06 a.m. ET, London's blue-chip index .FTSE was down 2.48 points at 6,024.89. It hit its highest level since July 2011 on Wednesday after the United States secured a deal to stave off a series of tax hikes and spending cuts that threatened economic recovery.

The agreement, however, only delayed even bigger budget battles and potentially sets up further bruising showdowns over the next two months on spending cuts and an increase in the nation's limit on borrowing.

"The rally seems to have been somewhat overdone and we would expect some pull back," Securequity sales trader Jawaid Afsar said.

"Short term we remain bullish but medium term, ahead of debt ceiling discussions in the U.S, we are more cautious as this is a larger issue to tackle which faces possible downgrades from debt agencies," he said.

(Reporting by David Brett; editing by Simon Jessop)