Europe midday: Stoxx falls as UK CPI in focus
By Frank Prenesti
Date: Wednesday 26 Mar 2025
(Sharecast News) - European shares were lower on Wednesday as investors assessed a surprise fall in UK inflation and an economic statement from British Finance Minister Rachel Reeves, which included savage cuts to public spending.
The pan-regional Stoxx 600 index was down 0.51% at 549. Germany's DAX was down by 0.7% while the UK's FTSE 100 was up 0.25%.
Headline UK inflation in February fell to 2.8% year on year from 3%, with core CPI - which strips out volatile items such as food and energy - down to 3.5% from 3.7.
Analysts said the fall boosted the case for an interest rate cut from the Bank of England in May but also warned that inflation would probably rise again as higher taxes introduced in the last Budget kicked in next month.
Meanwhile, Reeves delivered her so-called "spring statement" and unveiled huge cuts to welfare spending - seen as a return to austerity measures imposed by previous Conservative governments from 2010 onwards - including benefits for disabled people as she struggles to meet her self-imposed fiscal rules on borrowing.
The government is looking for cuts to pay for its pledge to ramp up defence spending after US President Donald Trump pivoted towards Russia over the war in Ukraine as it seeks to secure financial deals with Moscow and an agreement on Ukraine's future minerals production.
In equity news, CD Projekt fell almost 10% as the game developer on Tuesday said the release date for the first part of its 'Witcher IV' trilogy would be after 2026.
Ocado surged after JPMorgan Cazenove upgraded the shares to 'overweight' from 'neutral' and lifted the price target to 400p from 340p.
Reporting by Frank Prenesti for Sharecast.com
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