* FTSE up 1.1 percent at best levels for 12 months
* Miners strong; Xstrata lifted by RBS upgrade
* Next H1 results top guidance
By Jon Hopkins
LONDON, Sept 16 (Reuters) - Britain's FTSE 100 hit a 12-month high early on Wednesday, up 1.1 percent, after strong gains in the United States and Asia, with commodity issues leading the charge higher on hopes that economic recovery will boost demand.
At 0809 GMT, the FTSE 100 index was 46.87 points higher at 5,087.05, having earlier hit a new 2009 peak of 5,089.00. The benchmark index closed 0.5 percent points higher on Tuesday, marking its third straight session of gains.
"Every time the market looks to be losing a bit of momentum something, however small, comes in and gives investors an excuse for buying ... and there doesn't seem to be anything on the horizon that people are worried about," said David Morrison, market strategist at GFT Global.
U.S. and Asian stocks moved higher as the Federal Reserve chief Ben Bernanke said on Tuesday the recession was likely over, but the recovery would be slow and it would take time to create jobs.
Miners provided the main strength for the London market, boosted by firmer metal prices as Bernanke's comments raised hopes for an increase in demand.
Xstrata, Fresnillo, Eurasian Natural Resources, Tio Tinto, Randgold Resources, and BHP Billiton gained 2.1 to 4.1 percent.
Xstrata was also lifted by an RBS upgrade to "buy" from "hold" with an increased target of 1,050 pence, up from 625.
Oil majors also moved higher as crude prices held above $70 a barrel, with Royal Dutch Shell, BG Group, Cairn Energy, and Tullow Oil up 0.7 to 4.4 percent.
Tullow and U.S. producer Anadarko Petroleum are set to announce they have established a new oil frontier stretching 1,100km along the African coast, the Financial Times reported.
Banks were strong too on hopes the recession is over, with Barclays, Lloyds Banking Group, Royal Bank of Scotland, and HSBC ahead 1.5 to 2.1 percent.
The European Commission may force Lloyds Banking Group to sell all or part of its key Halifax subsidiary in compensation for the billions of pounds of state aid the group has received, the London Times reported.
NEXT TOPS ESTIMATES
Britain's second-biggest clothing retailer Next gained 2.8 percent after it posted a 7 percent rise in first-half profit, at the top end of expectations, although it forecast a tougher second half and a flat full-year outcome.
The firm made pretax profit of 185.5 million pounds ($305.1 million) in the six months ended July. Analysts' forecasts ranged from 177 million to 185 million pounds, according to a company poll.
Next's firm results boosted other blue chip retailers, with Marks & Spencer and Home Retail Group .3 and 2.3 percent, respectively.
Defensive stocks got the cold-shoulder as investors appetite for risk increased, with utilities, tobaccos and food retailers all weak.
Scottish & Southern Energy, National Grid, Imperial Tobacco , British American Tobacco, and Sainsbury were down, losing 0.2 to 0.4 percent.
BAE Systems was the biggest FTSE 100 faller, down 1.3 percent after announcing plans to cut 1,116 jobs in the UK on Tuesday.
Ex-dividend factors took 0.55 points off the blue chip index, with Antofagasta, Cadbury, and Land Securities all losing their payout attractions.
Investors were also keeping an eye on the UK jobless report, due at 0830 GMT, with claimant count unemployment seen rising by 25,000 in August, after a 24,900 increase the previous month.
The ILO unemployment rate for May to July is seen moving up to 7.9 percent, from 7.8 percent in April to June.
After that the focus will shift to U.S. inflation numbers, with August CPI scheduled for release at 1230 GMT.
The UK index is up 45.7 percent since touching its March lows, though is still 6.9 percent below the level it was in mid-September 2008 before the collapse of Lehman Brothers. (Editing by Rupert Winchester)