Stock Market

European stocks drop sharply, and retail sales in the UK fall.

On Friday, the stock markets in Europe fell sharply because people are still worried that aggressive monetary tightening will cause a global recession.

By 3:55 ET (07:55 GMT), the DAX in Germany was down 1.8%, the CAC 40 in France was down 1.4%, and the FTSE 100 in the United Kingdom was down 0.4%.

Both the World Bank and the International Monetary Fund warned of an upcoming slowdown in the global economy on Friday. Indermit Gill, the chief economist of the World Bank, said he was worried about “generalised stagflation,” a time of low growth and high inflation.

Related: European stocks go up at the start of the day, and good news about deals helps Aveva and Schneider.

The U.K.’s retail sales fell by 1.6% in August, which is the most of any month so far this year, and by 5.4% for the whole year. This is more proof that the economy is slowing down.

Analysts were expecting a drop of 0.5% on the month and 4.2% on the year, so the numbers were much lower than that. This shows that the economy is sliding quickly into a recession.

At 05:00 ET (09:00 GMT), the Eurozone CPI for August will be released. It is expected to go up 0.5% from last month and 9.1% from last year.

Last week, the European Central Bank raised its key interest rates by a record-setting 75 basis points. It also said that more increases were coming as policymakers tried to stop prices from going up even more.

In business news, shares of Uniper (ETR:UN01) fell by 12% because Germany is close to buying a controlling stake in the struggling gas importer. This could lead to a full nationalisation of the company.

Germany also put the German branch of the Russian oil giant Rosneft into trusteeship on Friday. The federal regulator now runs the PCK refinery in Schwedt.

Oil prices stabilised on Friday, after big drops the day before, but they were still on track to fall for a third week in a row because people were worried that aggressive monetary tightening would hurt global growth and, in turn, drive up demand.

The hot U.S. inflation data has also made the U.S. dollar stronger, which makes oil more expensive for people who want to buy it with currencies other than the U.S. dollar.

By 3:55 ET (07:55 GMT), U.S. crude futures were down 0.2% to $84.97 a barrel, while the Brent contract was up 0.1% to $90.94. Both contracts went down by about 4% on Thursday, and they were expected to go down by almost 2% for the week.

Related: European stocks go up, but GDP growth in the UK is disappointing.

Also, gold futures dropped 0.8% to $1,663.80/oz, and EUR/USD fell 0.4% to 0.9957.

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