European markets trade higher; UK borrowing costs rise

European markets edged higher on Tuesday as investors in the region focused on inflation data and corporate earnings releases.

The pan-European Stoxx 600 index was 0.35% higher at 1:37 p.m. London time, with only the healthcare sector trading in negative territory.

Major bourses were in mixed territory, with the FTSE 100 down by around 0.1%.

Annual inflation in the euro zone rose to 2.4% in December, a flash estimate from Eurostat showed on Tuesday, up from 2.2% in November. The print — which was in line with expectations, according to a Reuters poll of economists — was lifted by high services costs and rising energy prices.

Preliminary data from French statistics agency Insee on Tuesday showed prices in France rose less than expected in December. The country’s euro zone-harmonized Consumer Price Index was up 1.8% year-on-year — less than the 1.9% anticipated by economists polled by Reuters.

The French figures come a day after German inflation data showed the country’s consumer price index jumped to a higher-than-expected 2.8% in December. Analysts polled by Reuters expected a 2.6% reading.

In auto news, shares of Volvo were up 5% by 1:30 p.m. London time, after the Swedish carmaker reported a new global sales record for 2024.

Regional markets traded higher at the start of the week as investors assessed a media report suggesting U.S. President-elect Donald Trump’s tariff plan may not be as extreme as feared.

The Washington Post reported that Trump’s team is considering a plan to impose tariffs on all countries, but only on “critical imports,” although these were not specified. Trump later disputed the report in a Truth Social post.

Overnight, Asia-Pacific markets rose Tuesday, following Monday’s rally in technology shares on Wall Street that saw the S&P500 and Nasdaq Composite post back-to-back gains. U.S. stock futures slipped on Tuesday morning, however.

Correction: This blog has been updated to reflect that German statistics agency Destatis corrected its year-on-year harmonized inflation figure to 2.8% in December.