* Cobham firmer on broker upgrade
* Tui Travel falls after BofA Merrill Lynch downgrade
By David Brett
LONDON, Sept 14 (Reuters) - Britain's top shares were flat on Tuesday with investors pausing ahead of British inflation data and, later, U.S. retails sales figures.
By 0757 GMT, the FTSE 100 was down 2.05 points at 5563.48, having closed up 1.2 percent at 5,565.53 points, a fresh four-month closing high, on Monday lifted by a new deal over global banking rules and bullish China industrial data.
"We have had a terrific run with little pieces of information to encourage the system ... but I think it is a moment to pause for reflection," David Buik, senior partner at BGC Partners, said.
Banks and mining stocks again led on the upside on Tuesday, still feeling the benefit from the news in the previous session.
Investors will watch for British inflation data due at 0830 GMT, which should offer more clues on the state of the economy.
CPI was seen rising 2.9 prcent on the year in August, down from 3.1 percent the previous month.
While later in the session, investors will watch U.S. retail sales data, to gauge the state of the world's largest economy.
Defence group Cobham was a top gainer, up 2.5 percent as Credit Suisse upgraded its rating to "outperform" from "neutral", saying it has increased its earnings per share estimate for 2010.
FTSE OUTPERFORMS
London's blue chips have broken out of their July-August trading range and are so far outperforming indices in the United States which remain bunkered below summer highs.
"It (the FTSE) may be a little bit stretched," Phil Roberts, chief European technical strategist at Barclays Capital said.
He said there was Fibonacci resistance at 5,610 and a projection level up to around 5,700, and those two levels remained the final two barriers before the index returned to highs seen in mid-April.
TUI Travel shed 2.7 percent, topping the FTSE 100 fallers list after BofA Merrill Lynch cut its rating for the tour operator to "neutral" from "buy" and reduced its target price to 230 pence from 270 pence in a review of the European sector.
Next was also among the top blue-chip fallers, off 0.9 percent after Societe Generale cuts its rating on the fashion chain to "sell" from "hold" ahead of first-half results on Wednesday. (Editing by Dan Lalor)