- Eurozone inflation falls
- ECB highlights downside risks in monthly bulletin
- US jobless claims drop
- US CPI rises
FTSE 100: -0.07%
CAC 40: -0.30%
FTSE MIB: -0.85%
IBEX 35: -0.66%
Stoxx 600: -0.16%
European stocks declined as investors weighed inflation data in the Eurozone, Germany and US and the Labor Department's weekly jobless claims report.
Eurostat confirmed today that the consumer price index (CPI) for the Eurozone last month rose by 0.8%, down from November's 0.9% increase.
The core inflation rate, which excludes food, energy, alcohol and tobacco prices, slowed to a 0.7% year-on-year pace, comfortably below the previous month's 1% clip.
While the fall in inflation fuelled concerns of deflation, European Central Bank (ECB) President Mario Draghi blamed an adjustment by the German statistics office for the decrease.
The ECB last week said it would keep its policy unchanged, holding interest rates at 0.25%, but reiterated that it was "ready to act" should the economy take a turn for the worse.
In today's monthly bulletin, the EBC said risks surrounding the economic outlook for the euro-area continue to be on the downside.
The report, which mirrored comments made by Draghi last week, warned that developments in global money and financial market conditions and related uncertainties may have the potential to negatively affect economic conditions.
"Other downside risks include higher commodity prices, weaker than expected domestic demand and export growth, and slow or insufficient implementation of structural reforms in euro area countries."
Separately a report from the federal statistics office in Germany this morning showed inflation in Europe's biggest economy rose slightly in December by 0.4% on the month, pushing up the annual inflation rate to 1.4% from 1.3% in November.
US inflation rises, jobless claims fall
US consumer prices rose by 1.5% in December, up from 1.2% the previous month and in line with analysts' expectations.
Initial jobless claims fell by only 2,000 to 326,000 in the week ended January 11th, the Labor Department revealed separately, lower than the 328,000 claims predicted.
Analysts at IG said the better-than-expected jobless figures send the message the "tapering by the Federal Reserve is still justified".
Outgoing Fed Chairman Ben Bernanke was due speak in Washington this afternoon which could offer some insight into whether the central bank plans on another reduction to monetary stimulus.
In December the Fed announced it would begin unwinding monthly asset purchases by $10bn to $75bn.
Mining stocks rally
Mining stocks, including Rio Tinto and BHP Billiton, gained after Citigroup lifted its stance on the sector from 'neutral' to 'bullish', representing its first positive outlook for the industry in three years.
Royal Ahold NV retreated after the Dutch retailer posted fourth-quarter revenue of €7.47bn, missing the estimate of €7.57bn.
United Utilities rose after Morgan Stanley raised its rating on the UK water supplier to 'overweight' from 'equal weight'.
Aberdeen Asset Management slipped after the money manager reported a fall in assets under management and gross inflows in the fourth quarter, reflecting weak investor sentiment.
Ladbrokes edged higher after the UK betting firm said 2013 operating profit will be in the middle of analysts' estimated range of £129.8m to £151m.
Cie. Financiere Richemont declined after reporting a rise in third-quarter sales that missed projections.
Carrefourslumped after the French retailer posted a fall in fourth quarter revenue.
The euro was unchanged at $1.3605.
Brent crude futures dropped $0.121 to 107.000 per barrel, according to the ICE.