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* FTSE 100 down 0.2 pct
* Inflation data boosts financials
* Consumer staples stocks droop on higher prices
* FTSE mid-caps turn negative after record high
By Helen Reid
LONDON, March 21 (Reuters) - British shares dipped on Tuesday as sterling strengthened after British inflation shot past the central bank's target for the first time in three years.
The blue-chip FTSE 100 index, with its majority foreign-currency earning constituents, tends to gain from a weaker pound, which lifted it to record highs earlier this year. The index was last down 0.2 percent.
Sterling hit a three-week high after data showed inflation last month shot past the Bank of England's 2 percent target for the first time since the end of 2013.
Consumer prices leapt 2.3 percent, their biggest increase since September 2013 and up sharply from 1.8 percent in January, the Office for National Statistics said.
Retailer and Primark-owner Associated British Foods was among top fallers, down 1.1 percent. Consumer staples stocks, which face consumer demand pressures in a rising price environment, were the biggest drag on the index.
Financials stocks were the top gainers, with investors betting that the end of the deflationary era spells larger profit margins for banks.
Barclays was the top blue-chip gainer, up 1.6 percent. RBS and Standard Life rose 1 to 1.4 percent.
Rio Tinto and BHP Billiton were among top fallers as copper prices dropped on the resumption of talks over a long-running strike at BHP Billiton's Escondida mine in Chile.
Britain's mid-cap index hit a record high in early trade, before turning negative, down 0.2 percent after the inflation data.
Workwear and hygiene company Berendsen was weighing on the index after Barclays cut the stock to 'underweight' from 'equal weight', citing execution risk and questioning the merits of the company's capex step-up. (Reporting by Helen Reid, editing by Louise Heavens)