March 6 (Reuters) - Britain's FTSE 100 .FTSE index is seen opening higher on Thursday, with futures FFIc1 up 0.53%.

* BUDGET: British finance minister Rachel Reeves could have to choose between tax rises and a return to austerity when she delivers a budget update this month, The Institute for Fiscal Studies said, while the BBC reported that Reeves is planning cuts to welfare and other departmental spending.

* RIO TINTO: Rio Tinto RIO.L said it will invest $1.8 billion in its Brockman Syncline 1 iron ore project in the Pilbara region of Western Australia.

* DEFENCE: Top trade bodies for Britain's financial services and defence industries crafted a wishlist of policy reforms to drive more debt finance and equity capital towards Britain's defence sector, sources said.

* SOUTHERN WATER: UK's Southern Water has entered into talks with creditors to reshape its capital structure and avoid debt woes, Bloomberg News reported.

* COMMODITIES: Oil rose, gold prices were little changed and London copper touched a near three-week high.

* EX-DIVS: HSBC Holdings HSBA.L, Rio Tinto RIO.L, Dr Martens DOCS.L, PZ CussonsPZC.L and Berkeley Group BKGH.L will trade without entitlement to its latest dividend pay-out.

* The UK blue-chip index .FTSE closed flat on Wednesday after a sell-off in the previous session.

* UK CORPORATE DIARY:

* For more on the factors affecting European stocks, please click on: LIVE/

TODAY'S UK PAPERS> Financial Times PRESS/FT> Other business headlines PRESS/GB

(Compiled by Simone Lobo in Bengaluru)

((Simone.Lobo@thomsonreuters.com; +919920570373;))