LONDON — European stocks opened lower on Friday, extending losses amid a global downturn as weak U.S. economic data sparked fears of a recession.The Stoxx 600 on Thursday suffered its worst session since the middle of June, once again weighed down by financials as French bankThe Thursday decision took the British central bank's key interest rate from 5.25% to 5%, following a narrow 5-4 vote among policymakers. Markets had not been fully convinced that the BOE would take the step.
BOE Governor Andrew Bailey told CNBC that the direction for interest rates was "pretty clear," but he would not comment on the extent or timing of further cuts and said services inflation and wage data would be watched closely. Market pricing suggests expectations for a rate hold in September, followed by another rate trim in November.
More information will be added to the U.S. economic picture on Friday, as the U.S. Bureau of Labor Statistics releases the nonfarm payrolls report, while Europe is quiet on the data front.Cedric Chehab, global head of country risk at BMI, told CNBC's "Street Signs Asia" that a U.S.-led sell-off started a week and a half ago but escalated in the middle of this week.
"But one thing people aren't remembering is that usually between the period of July and October there is a seasonal rise in volatility for equity markets, so this isn't completely unexpected," Chehab said. "Especially after the fact that there was such a large rally in U.S. stocks and global stocks, the fact that earnings came in a bit mixed and valuations are high, but also monetary policy remains very tight in real terms," he added.
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