European markets close lower; Sterling falls and gilt yields rise after hotter than expected UK inflation

European markets lost ground in Wednesday trade, after U.K. inflation data came in higher than expected.

The pan-European Stoxx 600 index closed 0.5% lower, with almost all sectors in negative territory. Tech stocks led losses, down 1.6%, amid continued concerns over global growth; while mining stocks fell 1.5%. Autos dropped 0.6% despite strong new car registration data, as oil and gas saw a 1% uptick.

Annual U.K. headline consumer price inflation was 8.7% in May, the same level as April, official statistics showed. A Reuters poll of economists forecast a rate of 8.4%.

The monthly rate was also unchanged, at 0.6%. In unwelcome news for the Bank of England, core inflation — excluding energy and food — accelerated to 6.5% from 6.2%.

That comes ahead of the central bank’s monetary policy announcement Thursday.

John Leiper, CIO at Titan Asset Management, said the Monetary Policy Committee would — and should — now be more inclined to agree on a 50 basis point rate hike.

“The Bank of England is under a lot of pressure, the government is under a lot of pressure, and if they don’t get ahead of this then there’s a real risk that inflation expectations continue to get embedded into the number. We saw the wage numbers, blowout wage numbers, not too long ago and there’s a real chance this could continue,” Leiper told CNBC’s “Squawk Box Europe.”