European stocks gain after U.K. CPI grows more slowly than expected
Investing.com — European stock markets traded higher Wednesday after cooler-than-expected U.K. inflation, while investors await more earnings from major U.S. companies.
At 03:30 ET (07:30 GMT), the DAX index in Germany traded 0.3% higher, the FTSE 100 in the U.K. gained 1.3% and the CAC 40 in France rose 0.4%.
The latest consumer prices out of the U.K. showed inflation cooling more than expected, with annual CPI coming in at 7.9% in June, a fall from 8.7% the prior month and below the expected drop to 8.1%.
The drop in the headline figure will be welcomed by the policymakers at the Bank of England, but they are likely to be more impressed with the fall in the core number to 6.9% from 7.1%.
Markets have already priced another 100 basis points of Bank of England rate rises this year, but these numbers will ease some of the pressure on the Bank of England to keep on raising interest rates sharply.
The final reading of the June euro zone CPI is also due later in the session, and is expected to confirm that inflation rose 5.5% on the year last month, a drop from 6.1% the prior month.
The European Central Bank is widely expected to increase interest rates once more when it meets next week, but debate still exists about how far the central bank goes with its tightening after this.
«For July it is a necessity,” governing council member Klaas Knot, a known hawk, said in an interview on Tuesday, regarding interest rate increases, “for anything beyond July it would at most be a possibility, but by no means a certainty.»
In the corporate sector, Renault (EPA:RENA) stock rose 1.1% after the French auto giant said its worldwide sales rose 13% in the first six months of the year, with a 24% increase in Europe, rebounding after four
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