Peter Nurse

Investing.com – European stock markets edged lower Wednesday, struggling to maintain the week’s positive momentum as surging U.K. inflation raised concerns about interest rate rises and slowing growth.

By 4 AM ET (0800 GMT), the in Germany traded 0.1% lower, the in France fell 0.1%, and the U.K.’s dropped 0.1%.

The U.K. data released Wednesday morning showed that April saw a new 40-year high. This was 9.0% more than the year and the monthly average since 1991.

These substantial gains could be expected as the cap on gas and electricity prices for households was raised to reflect sharp increases in wholesale price due to Russia’s invasion of Ukraine. But, it suggests that even though there are increasing risks of recession, the Bank of England should continue to tighten monetary policy.

Deputy Governor Dave Ramsden said last week that the central bank will have to raise interest rates further to control surging prices, and there’s a risk that the U.K.’s worst inflation crisis in decades will take longer to ease fully.

Similar data is coming from the Eurozone later in session. It is anticipated to show 7.5% in April. This will increase the probability of the European Central Bank raising rates by 25 basis point in the summer.

On Tuesday, a member of the European Central Bank Governing Council suggested a potential half-point increase in interest rates if inflation risk worsens. However, he supports a smaller rate for now.

ABN AMRO stock (AS:), a corporate company, fell 9.9% following warnings by the Dutch bank that the conflict in Ukraine might have an effect on their business. This warning came despite the fact that its first quarter was better than market expectations.

Premier Foods LON stock rose 5.8% following the announcement that the food producer beat its expectations and increased dividends by 20%.

Siemens Gamesa (BME:) stock rose 11% after Siemens Energy (ETR:) confirmed it’s preparing a bid to buy the remaining third of the Spanish-listed wind turbine maker it does not already own.

Oil prices traded higher Wednesday on hopes that China is finally getting to grips with a prolonged COVID-19 outbreak, potentially increasing demand from the world’s largest importer of crude.

Shanghai, China’s main financial hub, achieved its milestone of three consecutive days with no new COVID-19 cases outside quarantine zones on Tuesday and laid out plans to end a more than six-week lockdown.

According to industry data, U.S. crude oil inventories fell unexpectedly by 2.4 Million barrels in the week ending May 17, according the sector body.

For confirmation, investors are now awaiting crude oil supply data for the U.S., which is due late in the day.

The contract was up 1.2% at $111.39/barrel by 4AM ET and 1.6% at $113.26

The price fell 0.3% to $1814.15/oz and traded 0.3% higher at 1.0515