Rate hike concerns weigh on European shares ahead of US inflation test

European shares fell on Wednesday with investors bracing for a crucial U.S. inflation report due later in the day for cues on the Federal Reserve's interest rate trajectory. The pan-European STOXX 600 fell 0.5% by 0707 GMT, with rate-sensitive tech stocks down 0.8%. Investors also eyed industrial production data for UK and the euro zone due later in the day.

European shares fell on Wednesday with investors bracing for a crucial U.S. inflation report due later in the day for cues on the Federal Reserve's interest rate trajectory.

The pan-European STOXX 600 fell 0.5% by 0707 GMT, with rate-sensitive tech stocks down 0.8%. U.S. consumer prices likely increased by the most in 14 months in August, but an expected moderate rise in underlying inflation could encourage the Federal Reserve to keep interest rates on hold at its meeting next week.

Meanwhile, the European Central Bank (ECB) expects inflation in the euro zone to remain above 3% next year, a source said, adding to worries about a tenth consecutive interest rate hike by the ECB on Thursday. London-listed shares of BP eased 1.6% as CEO Bernard Looney resigned on Tuesday with immediate effect for failing to fully disclose details of past personal relationships with colleagues.

UK's blue-chip FTSE 100 slipped 0.2%, also weighed down by data showing British economic output fell more than expected in July. Investors also eyed industrial production data for UK and the euro zone due later in the day.

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