European stocks fell after Mario Draghi said the European Central Bank will gauge the need for further stimulus early next year, quelling speculation the lender would start buying sovereign bonds soon.

The Stoxx Europe 600 Index slid 1.3 percent to 344.84 at the close of trading in London. The ECB also lowered its forecasts for euro-area inflation and gross domestic product through 2016. The stocks gauge gained as much as 0.5 percent, before losing as much as 1.4 percent.

The Stoxx 600 rallied 13 percent from a low in October through yesterday amid optimism the ECB will eventually embark on government-bond purchases, while central banks in China and Japan boosted stimulus. Since June, the central bank has cut interest rates twice, offered cheap loans to banks to spur lending and started purchase programs for covered bonds and asset-backed securities.

The ECB and the Bank of England left their interest rates unchanged, as predicted by economists in a Bloomberg survey.

Source : Bloomberg