Europe close: Stocks end mixed on inflation concerns

(Sharecast News) - European shares finished on a mixed note as worries that persistent inflation could see a delay in planned interest rate cuts this year weighed on sentiment.

The pan-European Stoxx 600 index was down 0.16% to 520.57. Meanwhile, the French Cac-40 and Spanish Ibex 35 were down, but the German Dax and Italian FTSE Mib edged up by a tenth of a percentage point.

In the US, Federal Reserve policymakers had expressed greater worries about inflation over the course of the week, with price rises stubbornly refusing to come down to the central bank's target of 2%, while hot PMI survey data also suggested wage growth and prices may have some way to fall.

"With earnings season largely behind us, we will now see markets following the economic data more closely, and unfortunately, we look set for a protracted period of high rates if recent inflation data is anything to go by," said Scope Markets analyst Joshua Mahony.

Similar problems emerged in the UK this week where inflation fell less than expected, posing a major headache for embattled Prime Minister Rishi Sunak, who has called a General Election for 4 July with his party 21 points behind in the polls.

Further misery came on Friday in the form of UK retail sales, which fell by a greater-than-expected 2.3% last month against a consensus estimate of -0.4% due to an extremely wet spring. March's figure was also revised to a 0.2% decline from flat.

"Sales volumes fell across most sectors, with clothing retailers, sports equipment, games and toys stores, and furniture stores doing badly as poor weather reduced footfall," the Office for National Statistics said.

In equity news, Intertek added 1% as the company backed its full-year expectations and hailed a strong start to the year, with 7% growth in like-for-like revenue, driven by a recovery in the consumer products segment.

Acciona fell 7% after the Spanish construction and energy conglomerate on Thursday said its core earnings would grow less than previously expected this year based on current forecast energy prices.