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European Stocks Fall as Juncker Warns on Euro Strength

European Stocks Fall as Juncker Warns on Euro Strength

U.K. annual inflation remained at 2.7% for a third straight month in December, official figures showed Tuesday, but there were signs that price pressure may begin to ease in the latter part of 2013. Inflationary pressure from energy, food and university tuition fees are likely to keep CPI above the Bank of England target of 2.0% in 2013 and could be another hurdle to any further monetary easing. Retail prices index (RPI) inflation rose marginally from 3% to 3.1%.

The euro’s 8 percent gain against the U.S. dollar in the past six months is posing a fresh threat to the European economy just as it shows signs of escaping the debt crisis, said Jean-Claude Juncker, who leads the group of euro-area finance ministers. The euro has rallied amid growing signs in financial markets that the three-year debt turmoil is fading and after European Central Bank President Mario Draghi last week signalled no immediate plan to ease monetary policy further.

U.S. consumers increased their spending at retail businesses in December, buying more autos, furniture and clothing. The Commerce Department says retail sales rose 0.5 percent in December from November; 1.6 percent jump in sales of autos. Steady job growth and lower gas prices kept consumers shopping for the holidays, despite worries about potentially tax increases. The economy has shown some signs of improvement in recent months.

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