European stock markets in the red after inflation surge in Great Britain

(Patria) - Major indices on European stock markets weakened slightly in the morning, after two days of recovery, as investors were cautioned by the unexpected February inflation acceleration in Britain.

The STOXX 600 index of leading European shares was down 0.07 percent at 9:30 AM, interrupting its rally after two days of strong gains thanks to the calming of the situation in the banking sector.

This morning, the FTSE index in London weakened by 0.24 percent, to 7,518 points, the DAX in Frankfurt by 0.06 percent, to 15,186 points, and the CAC in Paris by 0.31 percent, to 7,090 points.

Investors were cautioned by the latest data on annual inflation in Great Britain of 10.4 percent in February. This is an acceleration of its growth after 10.1 percent in January, and contrary to the expectations of economists, who estimated it would slow down to 9.9 percent.

The Bank of England will meet on Thursday, and most market participants expect that after the data on stubborn British inflation, it will raise interest rates by another 0.25 percentage points.

The announcement from the two-day meeting of the Fed, which began on Tuesday, is also eagerly awaited. It will be released on Wednesday, when Fed Chairman Jerome Powell will also hold a press conference.

Until recently, it was expected that the Fed would raise interest rates by an aggressive 0.50 percentage points at this meeting, but now many believe that interest rates will be raised by 0.25 percentage points, and some even believe that the Fed will not raise interest rates at all this month.

- The Fed will raise interest rates by 0.25 percentage points, and the market's reaction will depend mostly on what Powell says about the economy, inflation, and the situation in the banking sector - says Oliver Pursche, president at Wealthspire Advisors.

Share prices on Asian stock markets rose today, thanks to the rise of Wall Street for the second consecutive day. The Tokyo Nikkei index finished trading up 1.93 percent, at 27,466 points.