European shares edge down on 'fiscal cliff' concern

LONDON Thu Dec 13, 2012 3:19am EST

LONDON Dec 13 (Reuters) - European shares slipped on Thursday after persistent concern about U.S. austerity measures that could hit growth in the world's largest economy overshadowed fresh stimulus steps from the Federal Reserve.

The FTSEurofirst 300 was off 0.1 percent at 1,138.60 by 0812 GMT, erasing Wednesday's 0.1 percent gain.

The Fed announced a new round of monetary stimulus on Wednesday and indicated interest rates would remain near zero until unemployment falls to 6.5 percent.

But a key issue continued to be worries over the U.S. budget impasse, and whether the United States would miss a year-end deadline to avert the "fiscal cliff" of some $600 billion of tax hikes and spending cuts due to start in January.

Fed chairman Ben Bernanke warned on Wednesday that monetary policy would not be enough to offset damage from the fiscal cliff.

"I think we'll get a slow drift into the year end... there are no real factors that are going to come in to send it significantly higher. The overhang of the fiscal cliff is going to weigh on the upside to a certain extent," Michael Hewson, senior analyst at CMC Markets, said.

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