The pan-European STOXX 600 index fell 1.1% by 0711 GMT, trading less than 2% below its all-time highs. Euro zone stocks felt the pressure as the euro touched a four-month high, making exports more expensive.
A jump in regulated electricity and gas bills and clothing and footwear prices saw British consumer price inflation more than double in April, data showed on Wednesday.
While central bank policymakers expect the surge to be temporary, investors are worried that the price rises may last for a prolonged period of time, pushing central banks to counter it with policy tightening.
Investors will be watching for more clues on policymakers’ views on inflation when the U.S. Federal Reserve releases its minutes from the latest policy meeting.
A retreat in commodity prices made miners and oil and gas stocks among the top losers in Europe.
Swiss wealth manager Julius Baer inched up 1% after it posted an 8% rise in assets under management for the first four months of 2021. Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur