Europe close: Markets in the red on inflation concerns

(Sharecast News) - European stocks fell across the board on Friday, closing out the week at their lowest level in 13 trading days, as an acceleration in inflation at home and abroad dampened sentiment.

The pan-European Stoxx 600 index fell 0.6% to 550.62 - its lowest since 12 August - with broad-based losses across all major indices.

"European stock indices retreated on the last day of the week as profit taking kicked in ahead of the weekend," said Axel Rudolph, senior technical analyst at IG.

In economic data, German inflation rose more than expected to a five-month high of 2.2% in July, while Spanish inflation held steady at a five-month high of 2.7%.

One positive note was that French inflation unexpectedly eased to 0.9%, though this was "overshadowed by the country's political turmoil", Rudolph said, as stocks in Paris still slipped.

Over in the States, the personal consumption expenditures price index - the Federal Reserve's preferred inflation gauge - showed that core inflation rose to 2.9% in July from 2.8%, as trade tariffs had begun to work their way through the US economy.

Other economic data also disappointed investors on Friday, including retail sales in Germany, which dropped 1.5% in July. This offset the prior month's 1.0% increase and was the biggest monthly slip since August 2023.

Germany's unemployment rate held steady at 6.3% in August, remaining at its highest level in more than four years, though this was in line with economists' predictions.

R�my Cointreau falls despite lower tariff hit

R�my Cointreau couldn't escape the sell-off on Friday despite revising the estimated impact of US tariffs on business. The French spirits maker slashed the estimated negative hit on profits by �15m, following the trade deal reached between the US and EU, but shares still dropped 4%. Sector peer Pernod Ricard was also a heavy faller in Paris.

Shares in UK banks fell on worries that the government would target their massive profits for a tax to help bolster Britain's fragile public finances. NatWest, Lloyds and Barclays were among the main fallers on the FTSE 100 share index.

Also in London, JTC was a high riser, jumping 18% after saying it had received and rejected two takeover proposals from private equity firm Permira.