UPDATE 2-European shares slip; Italian stocks fall on political uncertainty

* STOXX 600 down 0.2

* Italy's top index drops 1.4 pct

* Innogy slumps after warning (Recasts, adds details, closing prices)

MILAN/LONDON, Dec 13 (Reuters) - Political jitters hit Italian stocks on Wednesday and the broader European market slipped lower before a Federal Reserve meeting that could provide more clues on future interest rate moves in the United States next year.

Italy's parliament will be dissolved between Christmas and the New Year with national elections probably set for March 4, a parliamentary source said on Wednesday.

Concern that no clear majority will emerge caused Italy's FTSE MIB index to fall 1.4 percent Sovereign Italian bonds also fell.

Italian banks, which have large exposure to government debt, fell 2.9 percent, their biggest one-day fall since May. Losses by UniCredit also weighed on stocks.

The pan-European STOXX 600 benchmark fell 0.2 percent, euro zone blue chips dropped 0.5 percent and UK's FTSE slipped less than 0.1 percent.

The Fed is widely expected to raise U.S. interest rates later on Wednesday, but the focus will be on its plans for further rises next year. The pace at which the Fed and other central banks will tighten monetary policy is considered a key factor in extending the current bull market into 2018.

The STOXX 600 is up 8 percent so far this year and Italy's FTSE MIB has gained 18 percent and is on track to be the best performer among top European indexes.

In spite of political uncertainty, Banca IMI analysts expect the FTSE MIB to rise another 13 percent by the end of 2018 and say the Italian market is still undervalued.

Elsewhere, Innogy slumped 13 percent after the German energy company trimmed its operating profit forecast for 2017, citing a difficult market for npower, its British retail energy supply business. Its parent, RWE, also fell 13 percent.

Swedish builder NCC fell 8.9 percent after it warned on Wednesday its operating earnings for the fourth quarter would be "close to zero."

Supermarket group Colruyt declined more than 7 percent fall after Barclays cut its target price for the stock.

Aurubis, Europe's biggest copper smelter, slid 2.6 percent on disappointing earnings.

In the UK, industrial-equipment hire company Ashtead gave back its gains of the previous session, losing more than 5 percent after Citi cut its rating for the stock.

Electrical goods and mobile phone retailer Dixons Carphone was the best performer, adding more than 8 percent after reporting record Black Friday sales.

Zara fashion chain owner Inditex rose by 1.7 percent after reporting net profit to September of 2.3 billion euros, a 6 percent gain. (Reporting by Danilo Masoni and Julien Ponthus, editing by Larry King)