By Tommy Stubbington 

European stocks edged higher Tuesday, reversing part of the previous day's decline, as investors awaited eurozone inflation data that could be crucial to the European Central Bank's next move.

The Stoxx Europe 600 was 0.3% higher in early trade. Royal Bank of Scotland PLC surged to the top of the index after the lender said losses on bad loans will be significantly lower than previously thought this year.

Analysts said gains were likely to remain slight, with growing protests in Hong Kong keeping investors on edge.

"The pro-democracy protests have given global equity investors another reason to retreat to the sidelines during the final trading sessions of the third quarter," said Ian Williams, economist and strategist at brokerage Peel Hunt.

Investors were also keeping one eye on price data in the eurozone, released later Tuesday, which could pile pressure on the ECB to signal a further easing of policy at its meeting later this week.

Eurozone consumer price inflation is expected to slow to 0.3% year-over-year in September, well below the ECB's target of close to 2%.

The euro was steady ahead of the data at $1.2692 against the dollar. The currency has fallen sharply in recent weeks as an anemic economic recovery prompts some investors to bet the ECB eventually may have to launch a program of asset purchases, known as quantitative easing, to bolster inflation.

"A [consumer price inflation] result below expectations would be of particular interest for the ECB as inflation is the ECB's official argument that might lead to QE," said Lutz Karpowitz, a currency strategist at Commerzbank.

Elsewhere in currency markets, the British pound climbed 0.2% against the dollar to $1.6272 ahead of the final estimate of U.K. second-quarter gross domestic product.

In commodities markets, gold was down 0.2% at $1,216.90, while Brent crude oil climbed 0.1% to $97.31 a barrel.

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