Europe midday: Shares lower as euro zone inflation hits record

European stocks were lower at midday as investors were spooked by a worse-than-expected jump in euro zone inflation to a record high in May, raising fears of faster interest rate rises, and a surging oil price as European Union leaders imposed more curbs on Russian crude exports.

The pan-European Stoxx 600 was down 0.50% in early trade. Only Britain’s energy-heavy FTSE 100 was up as the oil price pushed above $120 in the wake of a European Union decision to stop more than two thirds of Russian crude exports in response to its invasion of Ukraine.

“The upwards trajectory of the oil price may well have room left to run until a solid outline of how supply is going to be sourced,” said Hargreaves Lansdown analyst Sophie Lund-Yates.

Inflation in the single currency block jumped to a new record high of 8.1% in May, beating forecasts of 7.7%, and four times the European Central Bank’s 2% target. This added to news on Monday that German EU-harmonised inflation hit 8.7% in May, much higher than forecasts of 8%, and up from 7.8% in April.

Meanwhile in France, the figure hit a record of 5.8% in May, up from 5.4% in April, according to preliminary data.

In equity news, shares in B&M European Value Retail fell more than 11% after the company reported flat results for fiscal 2022 and warned of markdowns during the current financial year.

Shares of Dutch specialty chemicals company DSM surged trade after it announced a cash and shares merger deal with Swiss peer Firmenich.

German chemicals firm Lanxess jumped after announcing a joint venture with private equity firm Advent to buy DSM’s engineering business for €3.7bn.

Unilever shares climbed after the British consumer goods giant named American activist investor Nelson Peltz to its board.