This is CNBC's live blog covering European markets.

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."

Asia-Pacific markets largely fell on Wednesday, mirroring moves on Wall Street as stocks came back from the Juneteenth holiday to trade lower on Tuesday. U.S. stocks were lower on Wednesday as investors took a breather from last week's market rally and considered Federal Reserve Chair Jerome Powell's latest comments on inflation.

Powell said that more interest rate increases are likely on the horizon as inflation is still "well above" where it should be.

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More than 200 British companies fined for failing to pay minimum wage

More than 200 companies have been fined by the British government for failing to pay staff the minimum wage between 2017 and 2019.

Big name retailers including WH Smith, Marks & Spencer and Argos were ruled to have broken the law by underpaying around 63,000 employees in total.

The fines totalled £7 million ($8.9 million), along with £4.9 million in arrears, as reported by Reuters.

— Hannah Ward-Glenton

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Troy Ruhanen, president and CEO of advertising agency TBWA Worldwide, says artificial intelligence is helping to boost insights and strategy and is a "creative catalyst" for advertising and marketing.

Sterling falls after hot inflation print

The British pound was 0.38% lower against the U.S. dollar at $1.2712 at 1:45 p.m. London time, as markets digested higher than expected inflation figures.

Sterling was also down against the euro, by 0.3%.

"I think it's reflective of some worry," George Saravelos, head of FX Research at Deutsche Bank, told CNBC's "Street Signs Europe."

"We are worried about the U.K., because if you look at the big picture, GDP has been going sideways essentially for two years. You have the highest inflation in the developed world, the highest wage inflation in the developed world, and essentially some could argue we're moving into a wage-price spiral dynamic."

"The key issue here for the currency market is Bank of England credibility," he said. "If you think about the last year or so, the Bank of England has been too model dependent. They spent last year constantly pushing back on market pricing while every other central bank was endorsing market pricing and speaking about the need to keep inflation expectations contained."

Over the last three months, he added, market pricing had been assuming "full credibility" from the central bank — but markets are now beginning to worry about it not delivering sufficient hawkishness and real rates falling, as a "Bank of England credibility risk premium starts to build."

— Jenni Reid

Germany 'very slowly' exiting recession, Ifo Institute says

After entering a recession in the first quarter, German gross domestic product will decline by 0.4% overall this year, according to a new forecast from the Ifo Institute.

In March, the Munich-based research group forecast a 0.1% annual contraction.

Researchers expect inflation to fall from 6.9% in 2022 to 5.8% in 2023, and reach 2.1% in 2024.

The report says higher consumer prices will curb real incomes and therefore consumption, while construction activity cools.

"The German economy is only very slowly working its way out of the recession," said Timo Wollmershaeuser, Ifo's head of economic forecasts.

— Jenni Reid

European bond yields higher

European bond yields rose Wednesday as hot U.K. inflation data fueled concerns over the path of interest rates and economic growth.

Short-dated U.K. gilt yields rose 10 basis points to scale new 15-year highs, as 5- and 10-year yields also moved higher.

German bund yields also nudged higher, with 2-year and 10-year yields both up around 1 basis point and the 30-year yield up 6. Yields move inversely to prices.

— Jenni Reid

ECB's Kazimir: September rate hike not certain

A rate hike by the European Central Bank in September is not guaranteed, Governing Council member and Slovakia's central bank head Peter Kazimir said Wednesday, according to a Reuters report.

Kazimir said the outlook beyond the expected July hike is not certain, though he said he would need to see evidence that core inflation is under control.

The ECB announced a 25 basis point hike to 3.5% last week, taking its main rate to the highest level in 22 years.

— Jenni Reid

European new car registrations rise

New car registrations in the European Union rose by 18.5% in May, according to the European Automobile Manufacturers' Association. Sales were nonetheless 23% lower than in 2019.

The EU car market grew by 18% from January to May 2023, the group said.

— Jenni Reid

Europe stocks lower

European stocks continued the week's negative trajectory early Wednesday, with the benchmark Stoxx 600 index down 0.17% at 8:45 a.m. London time.

The U.K.'s FTSE 100 fell 0.38% after inflation data came in above expectations, while France's CAC 40 was down 0.25%. Germany's DAX managed a 0.1% gain.

— Jenni Reid

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Of those, the Wall Street bank predicts that one battery component maker's stock will halve, while another's will rise by 32% over the next 12 months.

The investment bank said cathodes, a part of a battery that attracts positive charge, are increasingly being seen as a commodity. This means that many companies are producing similar kinds of cathodes, which could lead to an overabundance. Such oversupply typically means companies must lower prices to stay competitive and potentially squeeze their profits.

CNBC Pro subscribers can read more here.

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According to Tom Lee, managing partner of Fundstrat Global Advisors, the answer is yes for these three areas.

CNBC Pro subscribers can read more here.

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European markets: Here are the opening calls

European markets are heading for a positive open Wednesday.

The U.K.'s FTSE 100 index is expected to open 6 points higher at 7,570, Germany's DAX 36 points higher at 16,142, France's CAC 1 point higher at 7,293 and Italy's FTSE MIB 59 points higher at 27,775, according to data from IG.

Data releases include the latest U.K. inflation figures and new car registration data for France, Germany and the U.K.

— Holly Ellyatt