European stocks were flat

Friday, 15 April 2011 01:37

European stocks were flat as China’s inflation accelerated in March to the fastest pace since 2008,  US index futures and Asian shares retreated. Most indexes are up slightly except the Spainish IBEX which is down.

Figures out today show inflation in the euro zone climbed higher than expected in March to 2.7 % year-on-year, as fuel costs boosted the price of transport and housing. High inflation, spurred by commodity and energy prices, prompted the ECB to raise interest rates last week for the first time since the 2008 financial crisis and another rise is expected by July.

Eurostat estimated that inflation in the 17-country euro area jumped to 2.7 % in March, beyond its initial 2.6 % forecast and far above the 1.6 % recorded a year earlier. EU officials blamed the rising cost of fuel for transport and heating oil. The ECB targets inflation of below, but close to 2 % and headline price growth has been above that figure since December.

Bank policymakers will also have to weigh concerns that further rises will damage the hopes of recovery for the euro's weaker members struggling with high debt.