EUROPEAN stocks fell for a fifth week, completing the longest losing streak since January, as concern deepened that record oil prices and slowing economic growth will hurt profits.

ArcelorMittal, the world's largest steel maker, and Lonmin Plc paced a retreat in basic-resources companies, sending a measure for the industry to its worst week in more than two months. TUI Travel Plc, Europe's largest tour operator, and Iberia Lineas Aereas de Espana SA slipped as oil rose above US$145 a barrel for the first time. Marks & Spencer Group Plc, suffering from a slump in UK consumer spending, led retail stocks lower after reporting the steepest sales decline since 2005.

Europe's Dow Jones Stoxx 600 Index sank 2.7 percent to 279.53. Stocks have retreated worldwide this year, erasing almost US$11 trillion from global equity markets, on concern credit-related losses topping US$400 billion, record oil and accelerating inflation will force central banks to raise borrowing costs, Bloomberg News reported.

"Inflation continues to weigh on markets, clouding the outlook for earnings and economic growth," said Christoph Berger, who helps oversee almost US$100 billion as a fund manager at Cominvest Asset Management in Frankfurt.

"Economic headwinds bear risks for the market," Berger said.

European Central Bank President Jean-Claude Trichet played down prospects of higher interest rates, saying the quarter-point rise to 4.25 percent last Thursday will help bring inflation back below 2 percent.

Trichet said he has "no bias" on further moves.

Crude oil climbed to a record above US$145 a barrel in New York last Thursday. Prices have risen 2.8 percent last week and more than doubled in the past year.

National benchmarks declined in all 18 western European markets.

Germany's DAX Index fell 2.3 percent, and France's CAC 40 retreated 3 percent. The UK's FTSE 100 lost 2.1 percent. The Stoxx 50 slipped 1.3 percent, and the Euro Stoxx 50, a measure for the euro region, shed 2 percent.