European stocks are expected to open lower on Thursday as markets around the world get spooked by the latest U.S. inflation data.
London’s FTSE is seen opening 21 points lower at 6,983, Germany’s DAX 44 points lower at 15,112, France’s CAC 40 down 31 points at 6,253 and Italy’s FTSE MIB down 78 points at 24,126, according to IG.
European markets are set to follow the negative trend seen in Asia-Pacific overnight and the U.S. on Wednesday after the latest U.S. inflation data for April showed higher-than-expected price pressures.
The U.S. Labor Department reported that the prices American consumers pay for goods and services accelerated at their fastest pace since 2008 in April, with the Consumer Price Index spiking 4.2% from a year ago.
It has sparked fears that the U.S. central bank could increase interest rates sooner rather than later. The data prompted sharp declines in U.S. stocks with the Dow falling 681 points, or 1.99% lower, to notch its single-worst session since January. The S&P 500 lost 2.1%, its biggest one-day drop since February, while the tech-heavy Nasdaq Composite slid 2.6%.
The Fed has said previously that rising rates are temporary and that it would tolerate inflation that rises above its 2% target. It has said it will look at a range of inflation as acceptable.
