Stock markets across Europe end the day with decreases, fueled by geopolitical conflicts
European economies witnessed a mix of positive and negative developments in July and August 2025.
In France, the Gross Domestic Product expanded by 0.8% year-on-year in the second quarter, and the economy grew by 0.3% compared to the previous quarter. The total number of payrolled employees increased by 51,900, and the seasonally adjusted unemployment rate remained unchanged at 6.3%. However, France's annual inflation rate eased to 0.9% in August, below market expectations. On a monthly basis, consumer prices rose by 0.4%.
Germany, on the other hand, saw a drop in import prices of 1.4% year-on-year in July, with export price inflation softening to 0.6%. Retail sales declined by 1.5% monthly, but the German market saw a rally from Puma, which increased nearly 4%. The seasonally adjusted unemployment rate remained stable at 6.3%.
Norway bucked the trend and closed modestly higher, defying the general downward trend in European markets.
Across the Atlantic, the US consumer prices increased in line with estimates in July. The annual rate of growth by the PCE price index remained unchanged at 2.6%, while the core PCE price index ticked up to 2.9%.
The data suggests increased confidence in a Federal Reserve interest rate lowering next month. However, the US markets were not included in the scope of this report.
European stocks closed lower on Friday, with the pan-European Stoxx 600 closing down 0.64%. The UK market saw bank stocks under pressure amid reports of a likely windfall tax on banks.
It's important to note that the preliminary inflation rate for Germany in August 2025 was 0.8%, as reported. However, the institution that determined this rate is not explicitly mentioned in the available search results. The Federal Statistical Office (Destatis) and the Deutsche Bundesbank are typically the most authoritative sources for German inflation data.
In conclusion, while some European economies showed signs of growth, others faced challenges in the form of declining retail sales and inflation concerns. The US economy, meanwhile, continued its steady growth, but with the looming possibility of a Federal Reserve interest rate cut.
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