Gloomy Economic Data Impacted European Stocks

On Friday, European markets mostly fell after mixed trading in Asia and ahead of an expected lower US open. Traders have recognized that concerns about the cost of living as well as further recession-related fears are still elevated as investors digested relatively gloomy data.

Data released Friday showed German producer prices posted its biggest increase ever recorded, driven by higher energy prices, while UK consumer confidence hit a record low in August. With inflation set to surge further, some economists believe the worst of the spending crunch is still ahead in the near future. The Stoxx Europe 600, the CAC 40 and DAX all retreated while the FTSE 100 was slightly up, pushed higher by drug, consumer and oil shares.

Eurozone inflation was confirmed to have risen to a record high of 8.9% year-on-year in July, but inflation has not peaked yet. Although fuel prices have softened, the surge in wholesale prices continues and eurozone inflation is still expected to peak at 10.0% year-on-year in October.