European stocks fell on Wednesday as UK inflation fell less than expected in March, and ahead of another round of US corporate earnings.
The region-wide Stoxx 600 fell 0.4 percent, while Germany’s Dax and France’s CAC 40 lost 0.2 percent. Data released earlier in the day confirmed eurozone inflation fell to 6.9 percent in March from 8.5 percent in February.
London’s FTSE 100 lost 0.3 percent after annual growth in UK consumer prices last month slowed less than expected to 10.1 percent, down from 10.4 percent. February cent. Economists had expected a drop to 9.8 percent.
Core inflation remained unchanged at 6.2 percent while food prices and soft drinks rose 19.2 percent, “the highest seen in more than 45 years,” the Office for National Statistics said, from 18.2 percent in February. The pound rose briefly before giving up early gains to trade 0.1 percent lower against the dollar at $1,241.
Paul Dales, chief UK economist at Capital Economics, said the March figures mean it “has become even more likely” that the Bank of England will raise interest rates to 4.5 percent in May. “This launch even makes us wonder if that won’t be the peak.”
UK government bonds were sold on Wednesday morning, with yields on two gilts rising 0.13 percentage points to 3.81 percent, the highest level since late February. Futures markets now expect UK interest rates to peak at 5 percent in November, after trading at a peak of 4.78 percent in September ahead of the March inflation data.
“It is now clear that the UK has an inflation problem that is worse and more persistent than in Europe and the US,” said Ed Monk, associate director at investment management firm Fidelity International.
Across the Atlantic, contracts trailing Wall Street’s benchmark S&P 500 fell 0.2 percent, while those trailing the tech-heavy Nasdaq 100 lost 0.1 percent before the New York open. York.
Those moves came after Goldman Sachs said on Tuesday that its first-quarter profit fell 18 percent. Results from Tesla, IBM and Morgan Stanley will be released later in the day. Of the 19 S&P 500 stocks that have been reported so far, 15 have beaten earnings-per-share estimates and four have missed, according to Mike Zigmont, head of trading at Harvest Volatility Management.
US government debt was sold, with the yield on the two-year Treasury rising 0.09 percentage point to 4.24 percent, its highest level in a month, and the yield on the 10-year debt rising 0.03 percentage points to 3.6 percent.
Asian shares fell, with Hong Kong’s Hang Seng Index falling 1.4 percent and China’s CSI 300 Index shedding 0.9 percent, below its highest level since early February.