CAC 40 Tumbles As Recession Fears Mount

(RTTNews) - French stocks tumbled on Thursday after the world's top central bank chiefs warned that the high inflation pressure may last longer than expected.

Cleveland Fed chief Loretta Mester said the U.S. central bank is "just at the beginning of raising rates" and there are "risks of recession." She wants to see the benchmark lending rate hit 3-3.5 percent this year and "a little bit above four percent next year".

Meanwhile, French inflation quickened to the fastest since the euro was introduced, raising pressure on President Emmanuel Macron to address high inflation through a package of measures.

Consumer price inflation stood at 5.8 percent in June, up from 5.2 percent in May, data showed. The EU-harmonized figure climbed to 6.5 percent, ahead of forecasts of 6.3 percent.

The benchmark CAC 40 fell 118 points, or almost 2 percent, to 5,913 after losing 0.9 percent in the previous session.

Economy-linked sectors led losses, with banks BNP Paribas, Credit Agricole and Societe Generale falling 3-5 percent. Automaker Renault lost 3.5 percent.