Inflation worries knock Europe shares lower

LONDON, March 28 (Reuters) - European stocks fell on Friday, as signs of building inflation pressures in the euro zone dampened hopes for any European Central Bank rate cut soon, banks and oil stocks also dragged the index lower.

Utilities also dragged on the European market with E.ON EONG.DE falling 2.8 percent. The world's largest utility said 2008 profits would come out at the lower end of its predicted range.

The FTSEurofirst 300 index closed unofficially down 0.5 percent at 1,264.68 points. But the index rose 3.1 percent on the week -- its first weekly rise in the last five weeks and its largest weekly increase since early December.

Oil stocks fell as crude prices eased more than $1 a barrel as flows through Iraq's pipeline system were restored after disruption by a bomb attack a day earlier. BP (BP.L: Quote, Profile, Research) was down 1.8 percent and Total (TOTF.PA: Quote, Profile, Research) lost 0.6 percent.

Banks were among the biggest negative weights on the index. HBOS (HBOS.L: Quote, Profile, Research) was down 3.1 percent and UBS (UBSN.VX: Quote, Profile, Research) eased 2.4 percent.