- UK inflation data to be released
- US retail sales report in focus
- ECB addresses bad-debt rules in bank review
FTSE 100: -0.51%
CAC 40: -0.67%
FTSE MIB: -0.71%
IBEX 35: -0.77
Stoxx 600: -0.66%
European stocks fell as investors awaited reports on UK inflation and US retail sales.
The UK consumer price index (CPI) for December is expected to have risen 2.1% year-on-year, in line with the prior month, according to the consensus forecast.
It comes at a time when the market is observing against the risk of even lower inflation readings in the Eurozone and the US.
However, in France this morning CPI figures showed a rebound last month, easing concerns that a struggling economy could add to deflationary pressures. Prices rose by 0.3% in national CPI terms in December after measures were unchanged in November, the national statistics institute Insee revealed. The rise was driven by seasonal increases in air travel and vacation packages.
The harmonised measure of consumer prices, however, remained unchanged at an 0.8% rate of increase over the year, a tenth of a percentage point less than had been forecast.
Later in the day, US data on retail sales is anticipated to show a gain of 0.1% month-on-month in December, following an increase of 0.7% in November.
"The US retail sales figure will be very closely watched for signs that consumer sentiment is improving in line with the economic outlook," said Alpari UK Market Analyst, Craig Erlam.
"Consumer spending is hugely important to the economy and given that we've just seen a very disappointing jobs report, investors could do with a bit of a boost. A poor figure here would only add to calls for the Fed not to taper in January, after getting the ball rolling last month."
The Federal Reserve is turning to economic data to gauge the health of the world's biggest economy in weighing whether to announce a further scaling back of monetary stimulus at its next meeting at the end of the month.
The US central bank began unwinding monthly bond purchases by $10bn to $75bn last month.
ECB fears bad-debt rules could hurt bank review
The European Central Bank (ECB) is concerned that bad debt rules could hurt its review into the health of European banks, according to an internal document obtained by Bloomberg.
The central bank fears that national differences in how bad debt is classified could "severely affect the consistency and credibility of the exercise".
The ECB is conducting a three-stage review of bank assets before taking over responsibility of about 130 lenders in the bloc in November.
Volkswagen edged lower after UBS cut its rating of the carmaker to 'sell' from 'neutral'.
Celesio declined after McKesson said it failed to receive enough backing from shareholders to buy the drug distributor.
Jeronimo Martins slumped after the Portuguese retailer reported a slowdown in sales growth in Poland, its biggest market.
The euro rose 0.15% to $1.3691.
Brent crude futures climbed $0.56 to $106.810 per barrel, according to the ICE.