Europe markets muted as central bankers talk of more hikes

European stocks were little changed Thursday as investors assessed commentary from leading central bankers on the need to continue the fight against inflation.

The pan-European Stoxx 600 hovered fractionally above the flatline in early trade, with retail stocks adding 1% to lead gains while travel and leisure stocks fell 0.8%.

In a CNBC-moderated panel at the European Central Bank forum in Sintra, Portugal on Wednesday, ECB President Christine Lagarde, Bank of England Governor Andrew Bailey and Federal Reserve Chairman Jerome Powell vowed to push on despite growth risks.

Powell said there was “more restriction coming” and that “moving at consecutive meetings” was not off the table. He also said there was a “significant possibility that there will be a downturn,” even if this was not the most likely scenario.

It follows encouraging U.S. data earlier this week on increased key capital goods orders and consumer confidence.

Lagarde also acknowledged the possibility of a euro zone recession this year, although it is not the ECB’s baseline case. She told the panel a July hike was likely and that monetary policymakers “still have more ground to cover.”

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