European stock markets steadied on Friday with traders having expected news of record-high eurozone inflation that reinforced expectations of an ECB interest rate hike this month.

On the upside, the haven dollar jumped one per cent against the pound on rising expectations of a recession, while oil rebounded on tight supplies.

Eurozone inflation accelerated to another record high in June, official data showed on Friday, fuelled by fallout from the Ukraine war.

The EU's Eurostat data agency said annual consumer price inflation in the 19 countries that use the euro soared to 8.6 per cent in June, up from the prior record of 8.1 per cent in May.

"Today's figures bolster the European Central Bank's (ECB) intended decision to start raising interest rates at its next Governing Council meeting in July," noted economist Pushpin Singh at research group CEBR.

The ECB stated last month that it will deliver its first interest rate hike in more than a decade in July to combat inflation. 

Eurostat added on Friday that core inflation – stripping out volatile components like energy and food – slowed to 3.7 per cent from 3.8 per cent, helping equities to calm heading into the weekend pause.

Earlier on Friday, Asian stock markets closed lower after another Wall Street selloff.

Data showing US consumers – the backbone of the world's top economy – were growing increasingly reticent about spending dealt a fresh blow, with New York's S&P 500 index suffering its worst first-half performance since 1970.

With the war in Ukraine showing no sign of ending – keeping energy costs elevated – there is an expectation that borrowing costs will continue to rise and send economies into recession.

With the war in Ukraine showing no sign of ending – keeping energy costs elevated – there is an expectation that borrowing costs will continue to rise and send economies into recession

Losses across world markets this week come after a rally last week fuelled by hopes that an economic slowdown or signs of recession would lead central banks to ease off their monetary tightening drive.

But comments from top finance chiefs, including Federal Reserve boss Jerome Powell, suggest they are willing to endure the pain of a contraction as long as they can rein in prices – which are rising at their fastest pace in 40 years on both sides of the Atlantic.

The grim global economic outlook has also weighed on bitcoin, which has dropped back under $20,000.