European equities moved lower on Tuesday as investors reacted to rising political uncertainty in the UK and persistent macroeconomic pressure. The pan-European Stoxx 600 slipped more than 1%, with most major indices and sectors finishing in negative territory as risk appetite weakened across the region.
UK assets were under particular pressure amid escalating political instability, as calls for Prime Minister Keir Starmer’s resignation intensified following disappointing local election results and internal party tensions. British government bond yields climbed to their highest levels in months, while the pound weakened against both the U.S. dollar and the euro.
Banking stocks led the decline in London, with major lenders such as NatWest, Lloyds, and Barclays all falling sharply. Broader sentiment was also weighed down by renewed concerns over global growth and interest rate expectations after U.S. inflation came in hotter than expected, reinforcing fears that rates may stay elevated for longer.
In corporate news, earnings updates from major European companies delivered a mixed picture. Bayer shares rose after stronger-than-expected profit growth, while Vodafone fell despite revenue gains, as investors focused on margin pressure. Overall, markets remained under pressure as political risks and macro headwinds kept sentiment fragile.
