A look at economic developments and activity in major stock markets around the world Tuesday:

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LONDON _ The Bank of England warned that the British economy still faces "profound challenges," fueling speculation that the central bank may not yet be done with boosting the money supply via asset purchases.

The comments from Bank Governor Mervyn King led to a fall in the British pound against the U.S. dollar, but economists said the wider message from King and his fellow policy makers' testimony to lawmakers was that the central bank is keeping all of its options open.

King said that if the outlook for inflation _ currently well below the government's 2 percent target at 1.5 percent _ drops, then monetary officials would consider more asset purchases.

Meanwhile, the Bank of England revealed it lent two British banks 61.6 billion pounds ($101.8 billion) in emergency funding to save them from collapse at the height of the financial crisis a year ago.

It was the first time the bank has detailed the level of support it provided to the Royal Bank of Scotland PLC and HBOS PLC in October and November 2008, when the financial system froze in panic in the wake of the bankruptcy of Lehman Brothers. It added the money was paid back in full by January.

Separately, Lloyds Banking Group PLC said its shareholders will get a huge discount for subscribing to its 13.5 billion pounds ($22.3 billion) rights issue _ the country's largest cash call ever, designed to limit British government control.

The government has already agreed to exercise its rights for new shares, thereby maintaining its equity stake in the bank at 43.4 percent.

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FRANKFURT _ German business confidence rose for an eighth consecutive month in November as Europe's biggest economy recovered steadily from its worst recession in decades, a leading survey showed Tuesday.

The Ifo business climate index rose to 93.9 points in November from 92 points the month before, beating analysts' expectations.

"The firms are again not quite so dissatisfied with their current business situation," Ifo president Hans-Werner Sinn said in a statement. "Also, their view of the business outlook in the coming six months is more favorable than in October."

The Munich-based group said the climate for industry and trade clearly improved in November, while manufacturing, wholesale and retail also both posted improvements in their current business expectations readings. However, the construction industry saw a decline in sentiment.

In European trading, the FTSE 100 index of leading British shares closed down 0.6 percent, while Germany's DAX fell 0.6 percent and the CAC-40 in France was down 0.8 percent.

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