* FTSE 100 index falls 0.5 percent
* Wolseley rises after update
* Caution before ECB's policy meeting
* G4S hit by new scandal (Adds quote, detail, updates prices)
By Alistair Smout
EDINBURGH, June 3 (Reuters) - Britain's top share index edged lower in cautious trade on Tuesday, with most stocks falling in light volumes ahead of the European Central Bank's meeting this week, while substantial buying of plumbing supplier Wolseley provided some support.
Wolseley rose 2.7 percent, the top FTSE 100 gainer, after it reported a 5.1 percent rise in third-quarter like-for-like revenue and said it expected revenue to grow about 4 percent in the next six months.
"I've always liked Wolseley, and they've posted decent figures. They benefit from the U.S. housing market particularly, and they're going to carry on expanding," Joe Rundle, head of trading at ETX Capital, said.
Wolseley was the only stock on the FTSE 100 to have surpassed its 90 day average volume by 1030 GMT and one of only 13 stocks in positive territory.
The majority of stocks fell in trading volume of just 16 percent of the index's 90 day average.
The blue-chip FTSE 100 index was down 0.5 percent at 6,830.31 points by 1048 GMT, not far from a 14-year high of 6,894.88 on May 15. The index is around 2 percent below its record high of 6,950.60 set in late 1999.
"People are staying away from placing strong bets ahead of the ECB's crucial policy meeting. Investors are expecting some easing measures from the central bank, but are cautiously positioning themselves to avoid any disappointment," David Battersby, investment manager at Redmayne-Bentley, said.
"The market is just pausing for breath. I remain bullish and do think that there is further upside potential for the stock market in the medium term."
Euro zone price inflation fell unexpectedly in May, increasing the risks of deflation in the currency area and piling on the pressure for the ECB to act at its meeting on Thursday.
"He's almost promised too much, so he'll have to deliver something. If he doesn't, the market will tank, and if it does, it's probably priced in," Rundle said, referring to ECB head Mario Draghi.
The ECB is widely expected to trim its refinancing rate, send its deposit rate into negative territory and launch a long-term refinancing operation targeted at businesses. Another cut to the ECB's deposit rate, currently at zero, would effectively charge banks to park cash with it overnight.
Among individual fallers, G4S dropped 1.4 percent after the Financial Times reported the global security company was under further pressure as a British government-funded watchdog agreed to investigate its activities in Israel and the Palestinian territories. (Editing by Jane Merriman)