European Stocks Decline as Inflation Concerns Mount

European stocks fell on Wednesday, May 19, tracking the fall in Wall Street as investors grew concerned about mounting inflationary pressures, which increases the chances of an early tightening of monetary policy.

The European Stoxx600 index fell 1.1%, to trade below its all-time high of less than 2%. Eurozone stocks came under pressure with the euro touching its highest level in four months, which raises the cost of exports.

As a result of a jump in electricity and gas prices, clothes and shoes, consumer price inflation in Britain more than doubled in April, according to data released today.

Although decision-makers in the central bank expected the rise to be temporary, investors fear that the rise in prices will continue for a long time, prompting central banks to address this by tightening monetary policy.

The decline in commodity prices resulted in mining, oil, and gas stocks recording the largest losses in Europe.