Europe open: Shares slip as UK claims highest inflation in Western Europe

European shares opened lower on Wednesday as UK inflation fell less than expected with bets now on a 25 basis point rise in interest rates from the Bank of England.

The pan-European Stoxx 600 index was down 0.16%at 0730 GMT. France’s CAC 40 outperformed with a small rise, while the UK FTSE 100 was down 0.28% after official data showed Britain now has western Europe's highest rate of consumer price inflation after it to 10.1% last month, from February's 10.4%.

“Once again, expectations that UK inflation would finally fall to single digits for the first time since last summer have been dashed. Markets are now pricing in at least two further hikes, taking interest rates up to 4.75%, and are split on whether central bankers will need to go even further after that crucial core inflation number remained stubbornly static,” said AJ Bell analyst Danni Hewson.

“UK consumers will be utterly fed up with the situation and they’ll be angry that other parts of the world seem to be benefiting from inflation falling much faster. Warnings that some prices, notably food prices, might not yet have peaked will be beyond frustrating to many people.”

In equity news, Heineken shares rose as the brewer reported a steeper-than-expected decline in first-quarter beer sales, with a sharp drop in major markets Nigeria and Vietnam, but held annual profit growth forecasts.

Reporting by Frank Prenesti for Sharecast.com