PARIS (Reuters) – Major European stocks were lower in early trading on Wednesday as a lack of progress in U.S. debt ceiling talks and rising prices in the United Kingdom weighed on market sentiment.

In Paris, the CAC 40 lost 1.69% to 7,254.02 points around 07:55 GMT. In London, the FTSE 100 lost 1.41% and in Frankfurt, the Dax fell 1.47%.

The EuroStoxx 50 index is down 1.56%, the FTSEurofirst 300 1.27% and the Stoxx 600 1.55%.

Congressional Republicans and representatives of Joe Biden’s administration completed a new round of talks on Tuesday on the terms of a debt ceiling hike, with no sign of progress, raising fears of a US default. United, possibly as early as June 1st.

According to news reports, House of Representatives “speaker” Kevin McCarthy said in a closed meeting with Republicans that he was nowhere near a bipartisan deal with Democrats.

In the news of the central banks, the publication at 18:00 GMT of the minutes of the last meeting of the Federal Reserve could clarify the intentions of the central bank in terms of rate hikes and its diagnosis of the economy.

In New Zealand, the RBNZ indicated to everyone’s surprise that it had finished raising its key rate after having raised it to its highest level in 14 years.

It should be different for the Bank of England, according to observers after the unexpected acceleration of British core inflation in April, to its highest level for 31 years.

“Inflation figures have increased the possibility that the BoE will have to raise its rate again in June (…) Markets already estimate that it could peak at 5.5%, or 100 basis points above This is not good news for mortgage rates, although a lot of water may be flowing under the bridge between now and the June 22 meeting,” said Michael Hewson at CMC Markets.

The most marked decline is for the real estate sector, a compartment exposed to rising rates, which dropped 2.94%.

In values, Marks & Spencer gained 9.23% after announcing the resumption of a dividend payment in November and a less significant drop in profit than expected for the 2022-23 financial year.

Ocado dropped 1.79% as FTSE Russell announced that the UK online retailer was likely to be dropped from the flagship FTSE 100 index to join the FTSE 250.

(Laetitia Volga, edited by Blandine Hénault)

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