European Shares Subdued With UK Inflation Data In Focus

European stocks were flat to slightly lower on Wednesday, as investors reacted to stronger than expected U.K. inflation data and awaited Federal Reserve chairman Jerome Powell’s testimony before the House Financial Services Committee and the Senate Banking Committee.

The pan European STOXX 600 was down 0.1 percent at 458.74 after losing 0.6 percent on Tuesday.

France’s CAC 40 slipped 0.1 percent while the German DAX and U.K.’s FTSE 100 were little changed in cautious trade.

Official data showed that U.K. consumer prices logged a steady growth rather than a slowdown in May.

Core inflation accelerated further, adding pressure on the Bank of England to raise the benchmark rate by half a percentage point.

Consumer price inflation came in unchanged at 8.7 percent in May while analysts had forecast the rate to ease to 8.4 percent.

Core inflation that excludes energy, food, alcohol and tobacco climbed to 7.1 percent, which was the highest since March 1992.

Telecoms firm VEON fell 1.4 percent after it announced plans to invest $600 million in the infrastructure of its subsidiary Kyivstar, Ukraine’s largest mobile network.

Automakers BMW, Volkswagen and Renault climbed 1-3 percent after industry data showed new car sales in the European Union rose 18.5 percent year-on-year in May, following a 17.2 percent growth in April.

Banks traded higher as German two-year government bond yields surged to their highest level since March 10 after the release of stronger than expected U.K. inflation data. Commerzbank gained 1.2 percent and Deutsche Bank rallied 1.7 percent.

Deutsche Lufthansa added 1.3 percent. The airline has signed a deal with Swedish lender, SEB Kort Bank AB, to sell its travel payment solutions business Lufthansa AirPlus Servicekarten GmbH, for around 450 million euros.

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