• The pan-European Stoxx 600 fell by 0.4%, with most sectors and major bourses in negative territory.
• It is set to be an important week for monetary policy with the U.S. Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank all due to make decisions this week.

LONDON — European stocks slipped on Monday as traders reacted to developments regarding the omicron Covid variant and looked ahead to monetary policy decisions by some of the world's largest central banks.

The pan-European Stoxx 600 closed lower by 0.4%, with most sectors and major bourses in negative territory.

It is set to be an important week for monetary policy with the U.S. Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank all due to make decisions this week.

It comes amid a growing focus on super-high inflation and how central bankers will react. On Friday, U.S. inflation came in at its fastest pace since 1982, but markets managed to shake it off with the S&P 500 clocking up its best week since February.

In his morning note Monday, Societe Generale Global Chief Economist Klaus Baader referred to a heavy central banks' agenda this week.

He expects: "accelerated tapering and signals for an earlier rate hike by the Fed" and "intention to put the PEPP [pandemic emergency purchase program] on hold by the ECB." He also sees the Bank of England "reluctantly" holding its position and the Bank of Japan keeping its accommodative stance.

On Wall Street Monday, the S&P 500 pulled back as investors remained cautious about how the omicron variant will impact the economy and what the Federal Reserve will announce on Wednesday.

The U.K. on Sunday raised its Covid threat level, with Prime Minister Boris Johnson warning of a "tidal wave" of Covid cases as a result of omicron. From this week, booster jabs will also be offered to all adults in England.

"It is now clear that two doses of vaccine are simply not enough to give the level of protection we all need," Johnson said. "But the good news is that our scientists are confident that with a third dose, a booster dose, we can all bring our level of protection back up."

Johnson confirmed Monday that at least one patient infected with the new omicron variant has died in the country.

"Sadly yes, omicron is producing hospitalizations and sadly at least one patient has been confirmed to have died with omicron," Johnson told reporters on a visit to a vaccination clinic near Paddington, London, according to Sky News.

On the data front in Europe, investors will be watching the Bank of England's financial stability report and U.K. stress test results. Bank chief Andrew Bailey is expected to hold a press conference at 5:30 p.m. London time.

When it comes to individual stock action, Credit Suisse announced an overhaul of its executive board early Monday. Shares were down 1.7%.

Meanwhile, Vifor shares jumped 18% after confirming that it was in merger talks with Australia's CSL.

— CNBC's Saheli Roy Choudhury contributed to this report.