Europe close: Stocks end mostly in the red on UK 'noflation' and Greek debt concerns

LONDON (ShareCast) - Most of the European equities closed in the red following reports of the UK's 'noflation' and Greece's debt woes. The Office for National Statistics said UK consumer prices remained at zero in March compared to year ago, as expected by analysts. Analysts said "noflation" is likely to hang around amid a slump in oil prices.

"We expect inflation to remain close to zero until the latter months of this year, at which point the base effects, caused by the collapse in oil prices, will begin to kick in," said Martin Beck, senior economic advisor to the EY ITEM Club.

"Against this backdrop we continue to expect the Bank to wait until early 2016 before raising interest rates, with consumers continuing to enjoy a healthy boost to their spending power in the interim." Meanwhile, Greek finance minister Yanis Varoufakis will meet with President Obama in Washington on Thursday as EU officials warned the country was far from reaching an agreement with creditors to unlock further aid.

The Greek government's next payment to the International Monetary Fund is due on 1 May for €203m amid fears the country is rapidly running out of cash.

The euro was up 1.04% at $1.0677 at close of trading.

Meanwhile, a report from Eurostat showed industrial production increased 1.6% year-on-year in February following a 0.4% rise a month earlier. Analysts had pencilled in a 0.8% gain.

In the US, retail sales rose 0.9% in March after a 0.5% drop a month earlier, missing expectations for a rise of 1.1%.

"Today's retail sales report was not entirely free of disappointments. But the main message is that the US recovery has started to bounce back in March after being restrained by inclement weather, Retail sales are the first major indicator to form the eagerly awaited 'V'," wrote Unicredit (Milan: UCG.MI - news) 's Dr. Harm Bandholz in reaction to the data.

In other news, the International Monetary Fund reiterated its 3.5% growth forecast for the global economy for 2015, but upgraded its 2016 estimate by 10 basis points to 3.8%. However, whilst upgrading its forecasts for Europe and Japan, the IMF downgraded its outlook for the US economy.

Companies Alcatel (Paris: FR0000130007 - news) -Lucent SA gained on news Nokia Oyj is in advanced talks to buy the company.

Hargreaves Lansdown (LSE: HL.L - news) was in negative territory as the company's co-founder stepped down.

Kuehne & Nagel International AG slipped as the world's biggest sea-freight forwarder reported first quarter earnings that were unchanged from a year earlier due to a stronger Swiss franc.

In commodities, Brent crude rose 1.29% to $58.69 per barrel at 17:00 BST, data from the ICE revealed.