Europe open: Shares fall as inflation jitters hit markets
Inflation jitters once again gripped European stocks at the open on Wednesday, after a weaker Wall Street performance overnight and news that UK consumer prices had more than doubled in April.
The pan-European STOXX 600 index fell 0.96% by 0744 GMT with Euro zone stocks under pressure as the euro touched a four-month high, making exports more expensive.
A jump in household energy bills and clothing and footwear prices saw British consumer price inflation more than double in April to hit its highest level in more than a year, according to figures released on Wednesday by the Office for National Statistics.
The consumer price inflation rate rose to 1.5% in the 12 months to April from 0.7% in March, in line with expectations and marking the highest reading since March 2020. The rate of core inflation - which strips out volatile elements such as food and energy prices - increased to 1.3% from 1.1%, also in line with consensus expectations.
Investors fear price rises may last for a prolonged period of time, forcing central banks to counter with tighter policy thereby lifting borrowing costs.
Traders were also waiting for more clues on policymakers’ views on inflation when the US Federal Reserve releases its minutes from the latest policy meeting.
In equity news, shares in plumbing and heating products supplier Ferguson topped the Stoxx index as it reported strong revenue growth of 24.5% in its third quarter, to $5.92bn (£4.17bn), and lifted full-year forecasts.
Swiss wealth manager Julius Baer rose 2% after posting an 8% rise in assets under management for the first four months of 2021.
Miners felt the impact of weaker copper and iron prices with Antofagasta, BHP, Anglo American and Rio Tinto all weaker.