European shares started the week in subdued mood, with UK house building stocks lower on news the UK government was ordering firms to pay £4bn for the removal of dangerous cladding.
The pan-European Stoxx 600 index was down 0.28% in early deals, with all regional bourses lower.
Investors will be eyeing US inflation numbers later in the week and testimony from US Federal Reserve Chairman Jerome Powell at his Senate nomination hearing.
“The (inflation) data is important as investors are closely watching for signs of whether inflation is still at a point where it can be controlled with monetary policy tools or whether the Fed has lagged behind in tackling higher consumer prices,” said Avatrade analyst Naeem Aslem.
In equity news, housebuilders were out of favour after the British government finally moved to help apartment owners who were potentially liable for massive bills to take down dangerous cladding from their buildings in the wake of a 2017 tower fire in London that killed 72 residents.
The discovery that apartment buildings around the country were covered in flammable cladding led to a row between the government, developers and owners over who should foot the bill for removal.
It was widely expected that the government would on Monday order companies to pay for cladding removal on buildings between 11 and 18 metres high. Owners had previously been expected to meet costs running to tens of thousands of pounds.
Shares in Barratt Developments, Bellway, Taylor Wimpey and cladding maker Kingspan were all lower on the news.
Elsewhere, shares in Swiss drugmaker Idorsia soared said after the company said it had received US Food and Drug Administration approval for its treatment for insomnia in adult patients.
French technology consulting company Atos slumped to the bottom of the Stoxx with a 16.6% fall after the company issued its second profit warning in seven months.
