European Stocks Decline on Inflation Concerns and US Interest Rate Bets

European stocks ended the week lower due to concerns about inflation and rising government debt. The STOXX 600 index ticked up 0.1% on Friday, but finished the week with an overall decline of 0.8%. Escalating conflict in the Middle East drove up crude prices and added to investor worries.

The US non-farm payrolls report showed ongoing stability in the labor market, which could influence the Federal Reserve's interest rate decision later this month. The prospect of higher US interest rates is adding pressure on global equities as European economies grapple with sluggish growth and rising energy costs.

Volkswagen shares jumped 5.9% to a two-month high after its supervisory board agreed on a turnaround plan, topping Germany's DAX index. Analysts are cautious about the company's prospects due to US import tariffs, a stagnant European market, and aggressive Chinese rivals.