LONDON — European stock markets closed higher Thursday after another cooler-than-expected U.S. inflation reading and a dip in U.K. gross domestic product.
The pan-European Stoxx 600 closed up 0.6%, with tech stocks up 1.7% and the majority of sectors ending the session in the green.
The U.K. economy contracted 0.1% in May, official figures showed, though this was less than the 0.3% month-on-month contraction forecast in a Reuters poll of economists. It comes amid intense focus on the country’s ongoing inflation battle, particularly after this week’s strong wage growth data.
The Stoxx gained 1.5% in Wednesday’s session as global markets responded to a fall in U.S. consumer price inflation to an annualized 3%. Core CPI came in at 4.8%, below a consensus expectation of 5% and the lowest reading since October 2021.
While markets are still pricing in a more than 92% probability of a 25 basis point rate rise from the Federal Reserve this month, according to CME’s FedWatch tool, the slowdown in inflation boosted economic sentiment and raised hopes of a less aggressive path ahead.
Asia-Pacific stocks closed higher Thursday, while U.S. stocks rose after another key inflation reading came in lighter than expected. June’s producer price index report rose less than anticipated.
