European stocks slipped into the red on Friday as higher inflation in the euro zone last month rattled investors.
The pan-European Stoxx 600 index was down 0.27% after a 3.4% rise on Thursday and early morning gains on the back of strong travel and leisure stocks.
Consumer price inflation in the euro area accelerated in August on the back of dearer energy and base effects, potentially piling on the pressure on the European Central Bank.
Eurostat confirmed that the annual rate of increase in the euro area’s Consumer Price Index jumped from a 2.2% pace for July to 3.0% in August. While that increase was in line with economists’ expectations, many believed that it had further to rise.
In the UK, retail sales volumes fell 0.9% in August from July and unchanged year on year, the Office for National Statistics said on Friday, as grocery sales were hit by more people returning to restaurants and pubs.
Analysts had forecast a 0.5% rise from July and year-on-year growth of 2.7%. Retail sales had risen 2.4% annually in July. However, August retail sales were 4.6% above pre-virus levels.
Elsewhere, UK ministers are looking to scrap a PCR test requirement for returning travellers who have been double-jabbed and scrapping the traffic light system for other countries.
“This would remove a huge blockage for the industry, though what hoops you need to go through once you get to your destination is another matter… ‘your papers please’…’I just wanted a sandwich!’, said Markets.com analyst Neil Wilson.
Shares in Wizz Air, TUI, British-Airways-owner IAG, InterContinental Hotels and airport catering operator SSP were all higher as the UK government considered easing England’s Covid-19 rules for international travel. IHG also got a boost as Berenberg upgraded the stock to ‘buy’.
Germany’s Commerzbank climbed after a Handelsblatt report said US investor Cerberus was considering taking a 15.6% state in the bank after the federal election.
Miners were on the back foot, led by Anglo American which fell tumbling 4.3% after Morgan Stanley and UBS downgraded the stock. Rivals Rio Tinto and BHP were also lower.
