European Shares Rebound After Selloff Amid Inflation Pressures

European shares rebounded on Friday after a sharp selloff driven by a bond market rout. The pan-European STOXX 600 rose 0.6% to 630.47 points by 1005 GMT, its highest in over three months.

Data showed euro zone inflation surged more than expected in September and is likely to rise further in the coming months. This keeps pressure on the European Central Bank (ECB) to raise interest rates again.

The ECB lifted interest rates last month, and traders are currently pricing in 81.8% chances of a rate hike in December, according to LSEG data. Equities have been battered in recent weeks as global government bond yields surged to multi-year highs.